SEATTLE – On the back of an all-time high in 2018, venture capital (VC) investment in the first quarter of this year has maintained its momentum, according to the PitchBook-NVCA Venture Monitor

The quarterly report released today is the authoritative source on venture capital activity in the US entrepreneurial ecosystem and is jointly produced by PitchBook and the National Venture Capital Associate (NVCA), with support from Silicon Valley Bank, Perkins Coie and Solium.

Among the developments: larger deals driving elevated total capital investment across fewer transactions; and valuations continuing to climb unprecedented levels.

These trends are largely due to increased investor competition and the prevalence of mega-funds (VC funds over $500 million), the report said.

Here are some of the highlights:

  • Corporate VC activity as a share of overall VC activity reached a new high, doubling over the past six years and underscoring the heightened role that CVC investors are taking in large rounds at later stages.
  • The exit market retained some of its momentum from 2018, with outsized liquidity events driving quarterly exit value higher. Lyft’s IPO and six VC-backed acquisitions over $650 million helped to carry exit value in 1Q 2019, with a host of upcoming outsized IPOs poised to buoy exit value throughout the year.
  • Fundraising in 1Q cooled compared to 2018 levels but appears primed to accelerate throughout the year as several prominent firms are on the road with new vehicles seeking at least $1 billion.

“Despite uncertainties around the sustainability of 2018’s record VC activity levels, the first quarter of 2019 bolstered healthy figures and is on track for another strong year,” John Gabbert, founder and CEO of PitchBook, said in a statement. “Investors continue writing larger checks to more developed startups, allowing late-stage companies the choice of operating in either the public or private market after weighing liquidity against transparency. When it comes to liquidity, there are several highly anticipated technology IPOs around the corner, and it will be vital to watch how private market valuations translate to the public markets.”

Added Bobby Franklin, president and CEO of NVCA: “Investment momentum from 2018 continued in the first quarter of 2019, and the industry naturally has a close watch on the big tech IPOs this year. However, much of the focus remains on investing in the new wave of successful companies—across many sectors and across the country—building the next big thing, whether that’s in areas like cybersecurity, robotics, applications of AI & ML, cancer treatments, neuroscience, or medtech,” At the same time, policy continues to affect the industry in a major way, as the early 2019 government shutdown likely delayed the string of expected VC-backed IPOs. Other policy areas like foreign investment rules implemented via the FIRRMA legislation pose a challenge to fundraising from foreign LPs and capital from foreign co-investors into startups, and the administration’s immigration policy continues to push away the best and brightest entrepreneurs to more welcoming countries.”