PwC and CB Insights’ latest MoneyTree Report reports a 3% increase in U.S. venture capital deals this past quarter. There were 1,374 deals in the second quarter of 2020 compared to 1,336 deals in the first quarter 2020. This increase comes after a three-quarter decline in venture deals. While the number of deals is down 18% year-over-year, there were 69 mega-rounds, or capital raises of over $100 million—a historic quarter high. Stripe, a late-stage fintech payments company completed the largest deal this quarter, raising $600 million. As private companies raise larger amounts of capital, there has also been a shift toward later-stage deals as shown below.
Source: PwC/CB Insights MoneyTree™ Report Q2 2020
Following three quarters of decline, IPO exits rebounded. In the second quarter of 2020, there were 24 IPOs of U.S. VC-backed companies. The average time to exit has remained relatively consistent since 2018 as shown below. M&A activity continued to decline this quarter, dropping to 120 exits in the second quarter 2020 from 155 in the first quarter of the year. Of the top five highest valued M&A exits, three were fintech companies.
Source: PwC/CB Insights MoneyTree™ Report Q2 2020
For the fourth quarter in a row, fewer companies have been valued at unicorn status (over $1 billion). There were eleven new U.S. VC-backed unicorns in the second quarter 2020, bringing the total number of unicorns this year to 209. Currently, according to the report, Stripe and SpaceX, a space tech startup, are the most highly valued U.S. unicorns with $36 billion valuations each.