The venture capital-backed deal industry has registered a second consecutive record-breaking quarter, as 2,362 deals were announced worth a combined US$49 billion, according to Preqin.
Preqin expects these figures to rise by around 5% as more information become available. This follows Q2, which saw 2,512 deals announced worth $48 billion, to put total deal activity in the first three quarters of 2017 at $128 billion, on course to become an all-time annual high.
However, these record values are being recorded by a declining number of transactions, with Q3 representing the sixth consecutive quarterly decline. Q1-Q3 2017 has seen 7,552 venture capital-backed deals announced, compared to 8,792 in the equivalent period of last year.
Deals in software account for the greatest proportion of deals (26%), but deals in internet companies account for the largest share of aggregate deal value (26%).
The largest venture capital deal announced in Q3 was the $2 billion financing of Grab Holdings. Funding came from investors including Didi Chuxing, the firm involved in the largest venture capital-backed deal ever recorded.
The largest venture capital-backed exit announced in Q3 2017 was the CNY 9.5bn sale of China-based Mango TV to Happigo.
North America saw the greatest activity in the quarter, with 939 deals announced for an aggregate deal value of $19bn. Israel saw the greatest drop in deal activity from the previous quarter. In Q2 2017, Israel made up 34% of aggregate deal value; in Q3, this figure stands at just 1%.
Series A financings made up 31% of venture capital deals in Q3 2017, while angel investments accounted for a further 26% of deal flow.
Later stage venture capital deals have increased in value over the past few years. While average series A-C financings in 2017 YTD are smaller than in 2016, Series D and later funding rounds have hit a new record high of $98mn.
“2017 now seems assured to set new records for venture capital-backed deal activity, as the industry has witnessed its second consecutive record-breaking quarter,” says Felice Egidio, Head of Venture Capital Products.
"Driven by the rising number of late-stage multi-billion dollar financings – eight in Q3 alone – the industry is setting new records with increasing regularity. Increased opportunities in emerging markets and increased appetite from investors are combining to propel the venture capital industry to new heights."