Early stage dollars fell 27% in March, to two-year low

Meanwhile deals hit an eight-quarter high, cutting the median deal size by 30 percent

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While venture capital, in general, has been down this year, the early-stage sector has seemed to be immune to market forces. Things have actually remained pretty steady for the most part, until March. It was an odd month, one where deals reached their highest level in nearly a year, but the amount of funding fell to their lowest level in a long time.

There were 344 early-stage tech deals, meaning seed/angel and Series A, in March, the most since 351 deals in June of 2015, according to data out from CB Insights. On a month-to-month basis, deals were up 31 percent, from 261 in February, and they were up 10 percent from 311 deals in March of 2015.

While more companies were getting funding, though, the number of dollars fell sharply last month, to $548 million. That is the lowest amount of funding that early-stage companies in the U.S. have seen in at least the last two years.

Funding was down 27 percent on a month-to-month basis, from $750 million in February, and down 19 percent on a year-to-year basis, from $677 million in March of 2015.

It only stand to reason that if more companies are getting funded, but there is less money to spread around, then median deal sizes have to drop. In March it was $2.1 million, down 30 percent from $3 million in February, and the lowest amount since October of last year. 

Breaking it down to just Series A, the average deal fell sharply as well. The number was $6 million, down 23 percent from $7.8 million the previous month. That's the lowest since December of 2014. 

The largest Series A deal during the month of March was AlphaSense, a search engine for financial professionals, which raised $33 million, followed by Cockroach Labs, provider of open source infrastructure solutions, which raised $20 million.

Wearable technology developer LifeBeam, and Convoy, an on-demand trucking service, each scored a $16 million round. The top five was rounded out by virtual reality company Voke, which raised $12.62 million.

For contrast, the largest Series A deal in February was biomedical data analysis company Seven Bridges, which raised $45 mllion.

On a quarterly basis, it was a similar story, as deals rose in Q1 of this year, while dollars sank. There were 886 deals, a 16 percent increase from 764 in Q4 2015. The number of dollars dipped 3 percent to $2.12 billion, down from $2.18 billion in Q4.

On a year-to-year basis, deals were essentially steady, dropping a mere 1.4 percent, while dollars rose 10 percent. 

It goes without saying that early-stage had a pretty bad month in March. It remains to be seen if it will be an outlier, or a sign that early stage is now going to start seeing the same downturn that the rest of the market has felt. 

(Image source: photos-for-you.com)