After ending 2018 strong, DC venture capital funding totals fell to start 2019 - Technical.ly DC

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Apr. 12, 2019 1:34 pm

After ending 2018 strong, DC venture capital funding totals fell to start 2019

D.C.-area companies raised a total of $325 million in the first quarter of 2019. Compared to the fourth quarter of 2018, it was a drop of over 55 percent in dollars and an increase of 84 percent in the number of deals completed.

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(Photo by Flickr user 401(K) 2012, used under a Creative Commons license)

For a second year in a row, D.C. metro area venture capital funding in the first quarter dropped when compared to the previous quarter.

In the first quarter of 2019, venture capital activity in the D.C. metro area totaled $323 million invested in 47 deals, according to data from a recent PwC/CB Insights MoneyTree report.

That was a 55 percent drop in total funding from the fourth quarter of 2018, but an increase of 84 percent in the number of deals. In the fourth quarter of 2018, D.C. metro companies raised $723 million in venture capital from 24 deals. Brad Phillips, a director in PwC’s Emerging Company Services practice, shared his insight about D.C.’s 2019 first quarter findings.

The dollar total for Q1 was lower than the average Q1 over the last few years but the second half of the year has seen more funding going back to 2015,” Phillips told Technical.ly. “For example, funding in Q4 for the last four years was $723 million, $779 million, $306 million and $748 million respectively.”

D.C. metro area companies also had 47 venture capital deals in the first quarter of 2018, but the dollars were higher at $549 million. Chevy Chase, Md.—based New Enterprise Associates came out on top again as the most active VC firm, with 27 investments in the first quarter in the U.S., and a total of 29 deals globally, according to the report.

Virginia companies saw a rise in funding, jumping roughly 100 percent from $100 million in the fourth quarter of 2018 to $199 million in the first quarter of 2019. The number of Virginia deals also increased by 145 percent, from 11 to 27. The report states that Virginia ranked ninth in deal volume and 10th in dollars compared to the other 49 states and the District overall.

The majority of VC deals went to companies in the internet sector, landing 50 percent of local funding ($164 million), while healthcare company investments dropped more than 60 percent to $56 million in funding compared to the fourth quarter of 2018.

Phillips said that even though PwC doesn’t do predictions, historically on average the second quarter in the last few years has been significantly higher than the $323 million seen in quarter one.

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Some of the area’s top tech deals in the first quarter of 2019 include a $45 million Series B round from D.C.-based Pie Insurance, Fairfax, Va.-based Remine‘s $30 million Series A raise and a $21 million Series B funding round for Vienna, Va.-based roadside assistance startup Urgent.ly. Overall the top 10 deals in the region accounted for 63 percent of the total dollars invested this quarter, which was $206 million of the $325 million total.

D.C. metro area companies aren’t the only ones who saw a decline in funding. National investment totals fell by 36 percent in the first quarter to $24.6 billion. Globally, VC totals declined 22 percent in the first quarter with $52.2 billion in funding.

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