Possibly as the result of some of 2015’s startups not quite meeting expectations, venture capitalists made fewer bets in the US last quarter, but they put more money into more mature private companies. While this does mean more secure investments for the venture investors, it also makes it more difficult for startups to find capitals.
Venture deals last quarter have dropped to their lowest number in four years, and while investments totaled $17.7 billion, more than half of that money went into late-stage companies. Investors are becoming skeptical as startup valuations go up, and mutual fund companies are writing down the values of their stakes. No tech company went public last quarter, which narrows the options for shareholders.
Still, venture capital investments are going up elsewhere. According to consulting firm Preqin Ltd., venture investments in China and India increased about 50% in the first quarter. In addition, larger and older startups are raising megadeals; Lyft raised $1 billion in January and Unity Technologies is seeking an investment to value the company at $1.5 billion.