RESEARCH TRIANGLE PARK – More data provides more evidence that emerging company and startup financing overall is off to a strong start in this still-young year.

PricewaterhouseCoopers LLP (PwC) and CB Insights’ 1Q 2018 MoneyTree Report provides confirmation the findings of the Pitchbook-NVCA Venture Monitor report, that 2018 is off to a big start in terms of capital investments in startups around the state, country and globe.

Data shows investments reached $46.5 billion globally, $21.1 billion in the U.S., and $213.4 million in North Carolina.

However, let’s be clear. The MoneyTree report differs from the Pitchbook-NVCA Venture Monitor report in a few key ways.

First, the MoneyTree report does not include angel or seed investments, it compiles data from investments to venture-backed companies only. While a small methodological tweak, the difference can be substantial. For instance, the difference in reported funding raised by U.S. companies between the two reports amounts to a cool $7.1 billion.

Second, the report compiles investment data from around the world and measures the U.S. against other countries and continents.

Finally, the report dives deep into sector analysis and reports on the top sectors each quarter.

Funding Trends

Globally, investments increased in 1Q 2018, even though fewer deals were made. Deal activity decreased by 4 percent and $46.5 billion was invested across 2,884 deals.

Nationally, the same global trend of more money spread across fewer deals held true. Over $21.1 billion was invested across 1,206 deals in the U.S. The report reports a four percent increase in funding invested despite a two percent decline in deal activity. It’s the second consecutive quarter that deal activity has dropped.

In North Carolina, the report shows North Carolina based companies raised $213.4 million across 15 deals.

However, since the MoneyTree report does not include angel and seed deals, the report includes less than half the funding shown in the Venture Monitor report which showed North Carolina based companies raised $430.89 million in 1Q 2018.

The top North Carolina deal it reports was PrecisionHawk’s $75 million raise, followed by nCino’s $51.46 million raise, and the Morrisville-based Liquidia Technologies which raised $25.5 million in February.

Biggest NC deals in Q1 as reported in MoneyTree analysis.

According to the report, mega-rounds—or funding rounds of $100 million or more—continue to dominate fundraises in 2018.

Nationally, it says 34 mega-rounds accounted for 34 percent of the total funding. Of the trend, CB Insights co-founder and CEO Anand Sanwal says, “Right now, a lot of the money flowing into venture-backed companies is from large corporates or sovereigns who need to put a lot of money to work at once. This diversion of attention away from early-stage venture is something worth watching as it will have knock-on effects down the line on the venture market.”

Other trends from 2017 continued in 1Q 2018.

  • Five new U.S. based companies reached unicorn status (over $1 billion VC invested in them) this quarter, including the robotic automation company UiPath, the messaging platform Intercom, and the food delivery service DoorDash.
  • AI-focused companies expanded their dominance of the VC market with a 29 percent increase in funding raised by AI companies. With $1.9 billion invested across 116 deals to U.S. based AI companies, funding to AI companies reached an all-time high.
  • Digital health focused companies also had a good quarter. With a 55 percent increase since last quarter, funding to digital health-focused companies hit $1.4 billion.

Meanwhile, the share of funding cybersecurity companies command continued to decline. Since Q2 2017, when investments in cybersecurity companies hit a high of $1.32 billion, investments in them have steadily declined. This quarter, they dipped to $528 million, over $300 million or 37 percent less than last quarter.

One more major VC report is due soon. WRAL TechWire will have the numbers.