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Among the top five deals of the second quarter, three have to do with driving
At first, the new data looks promising.
Private, venture capital-backed companies in the U.S. appear to have reversed the massive drop in venture funding between the fourth quarter of 2015 and the first quarter of 2016, according to Dow Jones VentureSource. As shown in the graph below, venture capital invested increased from $13.2 billion last quarter to $15.8 billion this quarter, a 19.8 percent jump. But the number of deals have continued to decrease—from 922 in Q1 to 845 in Q2, an 8.4 percent fall.
So how could funding have risen so substantially while deals continued to drop? The obvious short answer is that a smaller contingent of companies are raising larger amounts of cash.
The even shorter answer? Uber.
Added to Snapchat’s $1 billion-plus round, Uber’s massive $3.5 billion financing accounted for a third of all venture capital funding last quarter. In fact, even if you just subtract Uber’s round from the total ($15.8 billion - $3.5 billion), you’re left with an amount ($12.3 billion) that’s nearly a billion less than the total raised in Q1 2016. Stunning.
Here’s the full list from Dow Jones VentureSource of the top five deals for VC-backed companies in Q2 2016:
1. Uber secured a $3.5 billion investment from Saudi Arabia’s government-controlled Public Investment Fund, marking one of the largest ever fundraisings by a private company.
Not just the largest ride-hailing company in the world, Uber is also the most highly valued private company in the world with a reported $62.5 billion valuation. At this point, the company has raised over $12 billion in capital.
2. Snapchat raised a $1.3 billion late-stage round from a long list of investors, including Coatue Management, Dragoneer Investment Group, Fidelity Investments, General Atlantic, Glade Brook Capital Partners, Institutional Venture Partners, Lone Pine Capital, Meritech Capital Partners, Sequoia Capital, Spark Capital, and T. Rowe Price.
Though many outlets, including VatorNews, reported the round as totaling $1.8 billion, Dow Jones VentureSource is a bit stricter about their stats. They count approximately $537.6 million of the funding as taking place in Q2 2015.
Reports most lately peg Snapchat's valuation at $20 billion.
3. GT Forge, aka Gett, secured a $300 million investment from the Volkswagen Group, bringing its total funding to $520 million. The New York-based company serves up an on-demand black car and taxi app along the likes of Uber and Lyft.
4. Moderna Therapeutics, a biotechnology company based in Cambridge, MA, raised $200 million from American pharmaceuticals company Merck & Co.
5. Zoox, a Menlo Park-based developer of self-driving cars, raised $200 million in its first round of funding from AID Partners Capital, Blackbird Ventures, Draper Fisher Jurvetson, Lux Capital, and others.
As reflected in the top five deals, Dow Jones points out that the "Consumer Services" sector received the most investments in the second quarter, accounting for 41.3 percent of investments. Even more astonishing to me, however, is the fact that three of the top five deals were for automotive-related services: Uber, Gett, and Zoox.
In case you needed more evidence, we’re on the cusp of a revolution. The way people get around is going to fundamentally change everywhere in the world—the only question is how long the revolution will take.
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Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.