The top 10 cities for $100M VC rounds in 2018 so far

Crunchbase News recently profiled a selection of U.S. companies’ largest VC raised in 2018, and no surprise here: the 10 largest rounds all topped out well north of $100 million.

Crunchbase News recently profiled a selection of U.S. companies’ largest VC raised in 2018, and no surprise here: the 10 largest rounds all topped out well north of $100 million.

A major driver of global venture dollar growth is the relatively recent phenomenon of companies raising $100 million or more in a single venture round. We’ve called these nine and 10-figure deals, which shine brightly in the media and are hefty enough to bend the curve of VC fund sizes upwards, “supergiants” after their stellar counterparts.

And like stars, venture-backed companies tend to originate and co-exist in clusters, while the physical space between these groups is largely empty.

We noticed that many of the companies behind these supergiant rounds are headquartered in just a few metro areas around the United States. In this case, it’s mostly just the SF Bay Area, plus others scattered between Boston, Los Angeles, San Diego and one (Magic Leap) in the unfortunately named Plantation, Florida.

The San Francisco Bay Area is perhaps one of the best-known tech and startup hubs in the world. Places like Boston, NYC and Los Angeles, among others, are perhaps just as well-known. But how do these cities stack up as clusters for companies raising supergiant rounds?

Superclusters

That question got us wondering how these locales rank against other major metropolitan areas throughout the world. In the chart below, we’ve plotted the count of supergiant venture rounds1 topping out at $100 million or more through November 5. These numbers are based off of reported data in Crunchbase, exclude private equity rounds and do not account for deals that may have already been closed but haven’t been publicly announced yet.

Although U.S.-based companies have raised more supergiant rounds (168 year to date) than their Chinese counterparts (160 year to date), Chinese companies raise much bigger rounds, even at this supergiant size class.

How much more? U.S. companies have raised $38.4 billion, year to date, in nine and 10-figure venture rounds alone. Chinese companies have raised $69 billion across their 160 supergiant deals, which includes the largest-ever VC deal: a $14 billion Series C round raised by Ant Financial.

2018 in perspective

2018 is already a record year for venture funding worldwide. With more than $275 billion in projected total venture dollar volume so far, 2018’s year-to-date numbers have already eclipsed 2017’s full-year figures (a projected $220 billion, roughly) by more than $55 billion.2

And there’s still about eight weeks left to go before it’s New Year’s Eve.

  1. We use the same classification rules for what is and is not a “venture” round as we’ve used in our quarterly reports. Check out the methodology section of our most recent global VC report, from Q3 2018, to learn more about how Crunchbase News categorizes rounds.
  2. We’re referring to the same type of projected data we use in the quarterly reports. Check out the methodology section of our most recent global VC report, from Q3 2018, to learn more about how Crunchbase News uses projected and reported data.

SoftBank’s debt, Ford buys Spin, and Chinese coffee is huge money

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week was a blast. Connie and I were in the studio with our guest, True Ventures’s Tony Conrad, while Danny repped the other side of the country, dialing in from New York. It was another week shaped […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a blast. Connie and I were in the studio with our guest, True Ventures’s Tony Conrad, while Danny repped the other side of the country, dialing in from New York.

It was another week shaped by news from Asia. Once we had sorted the sartorially expedient, we first turned to the world of SoftBank, this time taking a close look at its debt load. While SoftBank is currently famous for its investments through its Vision Fund, the company is picking up some notable, debt-powered investments into its vehicle that could add to its risk profile.

After all, who doesn’t want more risk as 2018 comes to a close?

Moving on, Ford is doubling-down on its wager that mobility means more than cars, this time picking up Spin for some sum of money between $40 and $100 million, with most figures coming in a bit light from the nine-figure range.

We care as it’s a fresh turn in the scooter skirmish, not to mention the greater micromobility wars. Bird and Lime have a new competitor that has, possibly, super-deep pockets.

Next, we took a peek at Luckin Coffe’s meteoric rise. This is where our guest selection really showed off; Conrad is a former investor in Blue Bottle, making him a functional caffeine expert. We dug through margins, growth, and why venture players are interested in Luckin at all.

And finally, a look at how recently-public companies are selling more shares after their initial debut. So, when it comes to money on the table, don’t fret it too much.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

The SaaS VC gap: China & other markets trail the US

Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor Early-stage SaaS VC slip snaps recovery as public software stocks soar International growth, primarily in China, fuels the VC market today Chinese startups rule the roost when it comes to total reported venture dollars raised […]

Chinese startups rule the roost when it comes to total reported venture dollars raised so far in 2018. That is, mostly. In one key category at least — software-as-a-service, better known as SaaS — they do not.

Ant Financial raised the largest-ever VC round in June, a mind-boggling $14 billion in Series C funding. And nearly a dozen privately held Chinese companies, including SenseTimeDu Xiaoman FinancialJD Finance and ELEME, raised $1 billion (yes, with a “b”) or more in single venture rounds thus far in 2018.

But if there’s one thing to note from that shortlist of 2018’s largest China venture rounds, it’s this: almost all of them involve consumer apps and services. Despite being one of the largest economies in the world and currently holding the top spot in the national venture dollar ranks, China doesn’t seem to have too much in the way of enterprise-focused software funding.

But why trust your gut when the trend is borne out in the numbers? In the chart below, we show the top five global markets for SaaS investment (plus the rest of the world). We compare each market’s share of SaaS-earmarked funding against their share of total venture dollars raised in 2018 so far.

As of mid-October (when we pulled the data for the above chart), Chinese companies accounted for about 39.3 percent of venture funding raised in 2018. Compare that to 38.4 percent for U.S.-based companies, overall. In this respect, the venture markets in the U.S. and China are running neck-and-neck.

Yet for SaaS funding, the China-U.S. gap is about as wide as the Pacific Ocean. The U.S. — top ranked by this measure — accounted for approximately 70.1 percent of known SaaS startup funding. China, by contrast, accounted for just 11.7 percent. No even matchup here. It’s not even close.

This asymmetry goes beyond just aggregate dollar figures. The contrast is starker when we use a slightly more exotic measure for the market.

One of our favorite (if somewhat arbitrary) metrics at Crunchbase News is the count of supergiant venture rounds. These VC deals weigh in at $100 million or more, and they’re reshaping both sides of the venture market for founders and funders alike.

Whereas the United States played host to at least 15 supergiant SaaS VC rounds so far this year, just four rounds raised by three different Chinese SaaS companies crossed the nine-figure mark:

Keep in mind that, in general, U.S. and Chinese markets are fairly even in their output of supergiant venture rounds. However, that’s not the case when we look specifically at SaaS rounds, where the counts and dollar volumes involved are so different.

These disparities suggest a structural difference, not just between the U.S. and Chinese markets, but between the U.S. and the rest of the world when it comes to building and backing SaaS businesses.

At this point it’s unclear, apart from funding metrics, what differentiates the U.S. SaaS market from the rest of the world’s. What conditions exist in this market that don’t exist elsewhere? And are those conditions replicable in a local market with a still-nascent SaaS ecosystem? These are questions meriting a follow-up. Even though its cause might be unclear, for now, it’s nonetheless important to mind the gap. 🚇

Market turmoil, billion dollar funds, and the Qualtrics IPO

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week the normal band was together, with Connie Loizos, Danny Crichton, and myself on hand along with IVP investor Jules Maltz. We had yet another episode of market turmoil, that was again reversed to some extent before […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week the normal band was together, with Connie Loizos, Danny Crichton, and myself on hand along with IVP investor Jules Maltz.

We had yet another episode of market turmoil, that was again reversed to some extent before we could even talk about it. Our questions are somewhat simple: when does all this public market mayhem begin to impact private markets? Maltz isn’t worried yet, but we wondered not only about what level of upheaval is enough to change things, but also how we’d be able to tell when things were changing.

But, in keeping with recent news, the venture world is still blasting along. This week we talked about three different billion-dollar-plus rounds, including:

That’s a lot of new money charging into tech. If there’s going to be a downturn any time soon, it’s going to be a downturn that can afford a Bently. At least if the venture world keeps writing checks.

But not everything was doom, gloom and new cash. Yes, we had an IPO to go over. Qualtrics, one of the lesser-known but highest-quality companies out of the Utah scene is going public, and we like what we see.

How does solid revenue growth in the nine-figure range, effectively break-even GAAP profits, and strong cash flow sound? We’re guessing it’s going to sound pretty good to public market investors who have paid top dollar recently for tech IPOs that seem to be of, if we may, lesser quality.

Thanks for tuning in, we are back in a week!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Early-stage SaaS VC slip snaps recovery as public software stocks soar

Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor International growth, primarily in China, fuels the VC market today Corporate venture investment climbs higher throughout 2018 A few months ago, Crunchbase News reported that a longstanding period of SaaS investment stagnation had come to an end. […]

A few months ago, Crunchbase News reported that a longstanding period of SaaS investment stagnation had come to an end.

However, the investment boom times didn’t necessarily carry over to the seed and early-stage end of the subscription software businesses.

The chart below displays deal and dollar volume of seed and early-stage venture investments1 made into companies from around the world in Crunchbase’s SaaS category. Note that it is subject to historically documented reporting delays, which are most pronounced in seed and early-stage deals.

As can be plainly seen that Q3 2018 took quite a turn in terms of investment into SaaS. And it’s a bit bewildering as to why.

Overall, the venture market in Q3 hit record heights, and nearly every stage of investment saw more dollars and more rounds. Yet, as shown above, SaaS startups don’t appear to be beneficiaries of this influx of cash.

The public comparison

The picture becomes even more distorted when we account for public market SaaS comps, which set the benchmark for private companies. And that benchmark hasn’t been suffering. Public cloud companies have enjoyed a steep run up in asset value over the past several years.

The newly revamped BVP Nasdaq Emerging Cloud Index (formerly known as the Bessemer Cloud Index) tracks a basket of publicly traded SaaS stocks, including the likes of SalesforceAdobe and more recent debuts like DropboxDocuSign and Okta, among others.

Public cloud stocks soar

Public companies in the Bessemer Cloud Index grew their public valuations much faster than more broad-based indices like the Dow Jones Industrial Average and the S&P 500. Carried by the high and still-growing value of recurring revenuewarm reception of SaaS companies new to public markets and (with the exception of the past couple of weeks) generally stable markets overall, public SaaS companies have done well. Despite a pretty absurd rate of growth on the public side, no such consistent growth could be found on the early-stage, private end of the market.

However, rather than viewing Q3 2018 as a disappointment for the early-stage SaaS investment market, it’s more like a reversion to the mean. It’s the first half of the year that’s the outlier, not Q3.

Big deals, slowing pace

The first half of 2018 had some truly huge early-stage deals cross the wires. In March, Robotic process automation software company UiPath raised $153 million in its Series B. (UiPath just raised another $225 million in a Series C round in September.) Collaborative email inbox Front App raised $66 million in its January Series B. Rival Chicago logistics software companies FourKites and project44 each raised $35 million Series B rounds earlier in the year. On a one-off basis, these are big rounds, but collectively they add up to a huge pile of money.

The conclusion we’re drawn to here is that we were perhaps premature in declaring the long-time downtrend snapped to the upside.

  1. On the seed-stage side, that includes pre-seed, seed and angel rounds, as well as smaller convertible notes and proceeds from small equity crowdfunding campaigns. Early-stage deals include Series A and Series B rounds, as well as larger convertible notes and equity crowdfunding campaigns.

Twilio shops, Uber and Lyft IPO scuttlebutt, and Instacart raises $600M

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had the Three Excellent Friends (Connie Loizos, Danny Chrichton, and Alex Wilhelm) on hand to kick things about with Scale Venture Partner’s own Rory O’Driscoll. As I’ve written the last few weeks, what a pile […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had the Three Excellent Friends (Connie Loizos, Danny Chrichton, and Alex Wilhelm) on hand to kick things about with Scale Venture Partner’s own Rory O’Driscoll.

As I’ve written the last few weeks, what a pile of news we’ve had recently. And like the last few episodes, we had to pick and choose what to drill into. This week: Twilio-Sendgrid, Palantir, Uber, Lyft, and Tencent Music IPOs, Instacart, and Saudi Arabia.

In order, I think? First, we tackled the week’s biggest venture-themed M&A: Twilio buying SendGrid. Keep in mind that they are both recent IPOs; Twilio went out in 2016, and SendGrid in 2017.

The $2 billion-ish all-stock transaction is effectively Twilio using its rich market cap (rich in terms of its revenue and profit multiples) to snag an obvious (though intelligent) extension of API-powered communications toolset.

Next up we dug into the chance that Palantir is worth $41 billion. Spoiler: It isn’t. Then we chatted the two other recently-floated IPO valuations for Uber ($120 billion) and Lyft ($15 billion). They probably make more sense, depending a little on how you add and then divide.

All that and we also touched on the recent delay in the Tencent Music IPO, a profitable company.

Then we riffed through the Instacart round ($600 million more at a $7.6 billion valuation; wow), and re-touched on Silicon Valley’s currently least popular dinner party topic: how much Saudi money has recently gone to work powering tech startups.

A big thanks to you for not only sticking with Equity for so long, but also for making it quite literally as popular as it has ever been. It’s super fun to have the biggest crew with us every week that we’ve ever had.

You, yes you, are a delight.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

International growth, primarily in China, fuels the VC market today

The venture capital business model has gone global. VC is still an exclusive club of financiers, but now with worldwide scope and scale.

The venture capital business model has gone global. VC is still an exclusive club of financiers, but now with worldwide scope and scale.

According to Crunchbase projections Crunchbase News reported in Q3 2018, worldwide VC deal and dollar volume each set new all-time records. In the U.S. and Canada, deal volume declined slightly from Q2 highs but growing deal sizes pushed total dollar volume to new heights.

Much of this global growth comes from markets outside the U.S. and Canada. A recent collaborative study between Startup Revolution and the Center for American Entrepreneurship indicates that Beijing, China was the city that contributed most to global growth in venture capital investment growth.

Here’s the geographic breakdown of projected deal volume over time. Note a somewhat choppy growth pattern in U.S. and Canadian deal volume, and compare that to a more consistent growth pattern in international deal volume. (For more about how and why Crunchbase makes these projections, check out the Methodology section at the end of the global report.)

In rapidly growing startup markets like China, venture deal volume is also at all-time highs, though venture dollar volume is down slightly.1 For the Asia-Pacific region as a whole, venture deal volume is up roughly 85 percent from the same time last year. Reported deal volume in China is up more than fourfold during the same period of time.

The rise of China’s venture market may be best seen from a city-level perspective. Below is a chart displaying the 10 most active startup cities in Q3, ranked by count of venture deals for each city as reported at the end of Q3. (The Methodology section of the global report also explains what “reported” data is and how it’s used.)

Of the top 10 cities displayed above, only three countries are represented. If it weren’t for the rest of Silicon Valley bolstering the Bay Area’s numbers, Beijing would beat out San Francisco in raw deal counts. (But, then again, Beijing is home to three times as many people as the entire Bay Area.)

Using deal and dollar volume as rough metrics for vivacity (if not necessarily health), this spread in VC activity could be seen as a good thing for the market as a whole. A rising tide of global VC activity lifts all startup markets, worldwide. However, much of that growth is still concentrated in just a few big markets.

The worldwide expansion and local reinterpretation of the Silicon Valley venture capital investment model is a phenomenon with which market participants (founders and funders alike) must reckon. Founders are responding by raising lots of money in ever-larger rounds, hoping that big investor checks are enough to buy large chunks of growing markets. Investors, in turn, are raising ever-larger funds to satiate these companies’ seemingly bottomless appetites for capital.

As in most mega-trends, participants who fail to adapt to changing market conditions will end up on the losing end of the market cycle.

  1. It should be noted that dollar volume declined mostly because Q2 numbers were skewed north by a $14 billion Series C round raised by Ant Financial. To this date, it’s the largest VC round ever closed.

Blood capital, WeWork whisperings, and gobs of cash for smiles and vegetables

 Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had a good crew on the show. We had Connie Loizos and Danny Crichton from TechCrunch, I scampered over from the Crunchbase News domicile, and Brian O’Malley, a general partner with Forerunner Ventures, joined us to […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had a good crew on the show. We had Connie Loizos and Danny Crichton from TechCrunch, I scampered over from the Crunchbase News domicile, and Brian O’Malley, a general partner with Forerunner Ventures, joined us to us to round out the collective.

It was yet another packed episode. There’s so much going on in the venture world that we can’t get to it all. Not even a large fraction, really. So we did what we always do, and picked out our favorite bits.

Up top we talked about the recent market carnage. It’s been super rough for tech stocks large, small, medium, and SaaS. Everyone got hit. O’Malley gave us the standard venture answer that he isn’t a public market investor when we asked him about it, but as public market valuation multiples impact private market valuation multiples, this stuff matters to investors and founders alike.

Next up: What’s going on with WeWork and the Vision Fund? After some back and forth, it seems that world-famous capital cannon won’t pick up a majority stake in the starkly unprofitable shared-offices concern. But the saga demonstrates that the Vision Fund is more willing than ever to cut checks the size of small continents.

Where the Vision Fund gets its capital, though is under increasing scrutiny. After the apparent murder of a Washington Post columnist by Saudi agents in an embassy in Turkey, Saudi money is quickly becoming radioactive. Talking personally for a moment, perhaps it would have been better if the U.S. tech industry, famous for claiming to be more interested in improving the world than paying a dividend, hadn’t taken so much money from the ruling monarchy of a country famous for terrible treatment of women and LGBTQ folks, and for having an overdeveloped taste for the death penalty.

Regardless, there was even more news to get through. Forerunner itself recently raised a pretty penny, Egnyte is now $75 million richer thanks to Goldman Sachs, and two Chinese rounds clocked in at a combined $1 billion, give or take.

Crazy times. Thanks for listening, as always, and have a great weekend. Get some rest. We all need it.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Elon’s sick burn, Coinbase funding rumors, and VC hiring trends

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week was a treat. We had Danny Crichton in the studio. We had Connie Loizos in the studio. I was in the studio. And our guest, the excellent Andy McLoughlin, a partner at UnCork Capital, was in the […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a treat. We had Danny Crichton in the studio. We had Connie Loizos in the studio. I was in the studio. And our guest, the excellent Andy McLoughlin, a partner at UnCork Capital, was in the studio as well.

Thus it was with much enthusiasm that we first got to talk about the latest Elon Musk tweet to move Tesla’s stock, causing the famous CEO’s best-known company even more self-inflicted damage.

What a mess.

Happily, we had a whole show planned out before that happened, so after cleaning up Musk’s latest we tucked into a bit of our normal fare: big rounds, IPOs, and venture moves.

Up first was the $100 million Hopper round. For those unaware, Hopper is a travel-focused company that helps folks with flexible schedules get cheap tickets to fun places. Who these people are who have flexible schedules isn’t clear to me at the moment, but I’m sure someone, somewhere, isn’t effectively their Google Calendar’s valet.

Also up this week: $165 million more for ZipRecruiter, and possibly $500 million more for Coinbase. A few thoughts. First, it was super interesting that this was only Zip’s second known round ever, and that Coinbase’s valuation could have been even higher than the rumor. Perhaps even 50 percent higher.

Scooting to the next, the impending Tencent Music IPO caught our fancy. It’s going to be big, it’s going to be splashy, and the company actually makes money. What an odd trio of things! Yes, there are companies in the world that go public and make money. Just not that many of them these days.

And finally. there’s news out of the a16z fortress: a new partner rises. As Connie notes during the show, Andreessen as a firm has been on a bit of a hiring kick. Which is fair, frankly, as it’s not like the shop is short of cash.

That and a few jokes along the way were all that we had time for. Shout out to Andy for being fun, and you, for sticking with the show. Chat soon!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

SoftBank pays big, SurveyMonkey goes public and JUUL’s next step

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week on Equity, the gang was back together. We had the ever-excellent Connie Loizos on hand, along with TechCrunch’s Danny Crichton, and myself, on loan from Crunchbase News. Even better we had Iris Choi on the show. […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week on Equity, the gang was back together. We had the ever-excellent Connie Loizos on hand, along with TechCrunch’s Danny Crichton, and myself, on loan from Crunchbase News. Even better we had Iris Choi on the show. When she’s not hanging out with us for the pod, she’s a partner at Floodgate.

This week was another that offered a panoply of topics that we couldn’t get to in detail. Stripe’s huge new round, and attendant valuation bump, for example. Oh, and new Lyft financials too!

But we picked out the best, divvied them up, and here’s what we chose:

  • The SoftBank Payroll: SoftBank was super active in the past week, dropping capital into a number of companies. OYO was up first, a budget hotel startup based out of India. SoftBank has been a recurring investor in the firm, but most recently helped drop a billion dollars more into the company.
  • Also on the SoftBank front was a brace of real estate companies: Opendoor and Compass. Both raised $400 million this week, and SoftBank is backing each with checks. If the move was oddly internally competitive or not, is up for debate. Still, more huge checks from the Vision Fund.
  • SurveyMonkey’s IPO: After a long road to the public markets, the venerable SurveyMonkey managed to raise its IPO price above-range, and sold more shares than planned as well. Its stock then took off.
  • Bitmain’s IPO numbers, redux: After posting an incredible Q1, Bitmain had a pretty lacking Q2. Will this scuttle an IPO that was supposed to be a hot ticket? Can one of the most famous crypto-focused companies go public at all?

All that and we still had time to natter about JUUL, about which Connie had great notes on from her recent interview with the founders.

That is us, thanks for coming around, and stay cool!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.