In 2017, the level of venture capital (VC) activity in the U.S. rose, with $85.4 billion being invested across approximately 10,100 deals (see Chart 1). The aggregate amount invested in 2017 reflected compound annual growth of 6.5% from 2014. During the same time period, the average amount invested per deal has also increased.
Narrowing our focus a little closer to home, Chart 2 displays a more pronounced trend in VC activity in the Mid-Atlantic region. $16.7 billion was invested in 2017 across approximately 2,000 deals, which reflected compound annual growth of 16.8% from 2014. While the average amount invested per deal in the Mid-Atlantic region had consistently been lower than the national average, in 2017 that gap narrowed considerably.
Regionally, the Mid-Atlantic’s piece of the VC pie has expanded. While a distant second to the West Coast region, which includes Silicon Valley, Chart 3 shows that 20% of the VC dollars invested in 2017 went to the Mid-Atlantic, up from 15% in 2010. Not surprisingly, when drilling down into 2017’s VC investments in the Mid- Atlantic region, 41% of the investments and 32% of the dollars invested were attributable to the software industry group. Two of the three largest software investments involved DC-based firms: EverFi, a developer of a SaaS digital learning platform, which raised $190 million in an April 2017 Series D financing, and Mapbox, a provider of a web and mobile-based location data platform, which raised $164 million in an October 2017 Series C financing.
Will the upward trend in VC investments continue in 2018? If the first quarter activity is any indicator, the answer would be yes. With nearly $30 billion invested in U.S. VC deals in the first quarter, nearly $5 billion of which was in the Mid-Atlantic region, 2018 could be a record-setting year.
For more information or questions regarding VC investment trends and how Aronson assists venture-backed companies, please contact Bill Foote or Jimmy Zhou at 301.231.6200.
Note: Charts based on data from PitchBook Data, Inc. Excludes grants, crowdfunding, and accelerator/incubator deals. Dollar amounts in charts are expressed in millions.