DC’s Q2 venture capital dollars increased by 45% compared to last quarter

D.C. metro area venture capital funding in the second quarter increased compared to the first quarter of 2019.

Venture capital activity in the D.C. area for the second quarter of 2019 totaled $363 million invested in 39 deals, according to data shared in a recent PwC/CB Insights MoneyTree report.

This is a 45% increase in dollars compared to last quarter, which totaled $323 million in venture capital invested in 47 deals. D.C. proper companies garnered $58 million of the total second quarter funding, which was 14% of the funding that came into the DMV as a whole. This brings the first half of D.C.’s venture capital funding raise this year to $612 million, which PwC says is significantly off pace compared to 2018, which saw nearly $1 billion in venture capital by this time.

Companies in the region that fall in the internet and healthcare sectors received 78% of venture capital dollars invested in the first half of the year.

Brad Phillips, a director in PwC’s Emerging Company Services practice, shared his insight about D.C.’s 2019 second quarter findings.

“The dollar total for the top 10 deals in the region ($289M) accounted for nearly 80% of the total dollars invested in the area in Q2. Another trend we are seeing in this market (which is also prevalent at the national level) is that deals lists are top heavy, where the top few deals account for a lot of the total for the region. The average deal size for this region increased from $6M to $9M from Q1 to Q2,” Phillips told Technical.ly.

National investments jumped 10% compared to the first quarter because of 64 megaround deals valued at $100 million or more each. The last six months showed the largest total VC investments PwC has ever recorded for the first half of a calendar year.

Virginia companies saw a decline in funding compared to last quarter, after doing so well coming off of 2018’s fourth quarter. In Q1, Virginia companies saw $203 million invested in 28 deals, while this quarter Virginia companies secured $131 million across 21 deals. Virginia maintains its ranking in deal volume at #9, but it fell in its ranking in dollars from 10th to 18th compared to the other 49 states and the District overall in the second quarter.

D.C. ranked a little lower than its neighbor, coming in at #26 for both deal volume and amount of dollars. Compared to Q1, D.C. improved its deal volume ranking, having been at #32, but it fell from its dollar amount ranking, which it came in at #23, when compared to the 50 states.

“While I can’t speak to any predictions, I would say that if the year long trend continues, we will see more investment in the region in the second half than the first,” Phillips said. “Historically in this region, we also have a higher likelihood of a large deal in Q3 or Q4 than in the first half of the year.”

Some of the area’s top tech deals in the second quarter of 2019 include a $75 million Series B round from Gaithersburg, Md.-based Vielo Bio, Gaithersburg, Md.-based Xometry’s $5 million Series D investment and Rosslyn, Va.-based HUNGRY’s $8 million Series A round.