INSUBCONTINENT EXCLUSIVE:
Just four years ago, investors were putting less than $10 billion per quarter into early-stage deals (Series A and B)
The past two quarters, however, have all come in over twice that level
Q1 2018, meanwhile, looks to be a record-setting one, with Crunchbase projecting $25 billion in global early-stage investment.But while
A few years ago, North American startups reliably received at least two-thirds of global early-stage investment
of global early-stage investment.Huge Series A rounds are huge in ChinaBefore we venture further, it should be noted that although we
associate Series A with early-stage companies, this is not always the case
Some of the largest Series A rounds globally have gone to companies that were relatively mature but previously bootstrapped or spun out of
large corporations.Recent data shows both the United States and China have their share of spin-outs and older companies gobbling up
and $1.2 billion, respectively, are examples of such activity.Venture investors in China also put far more into Series A and B deals than
United States counterparts
size of the average Series A for a United States company.The momentum is holding up in 2018
So far this year, at least 12 Chinese companies have raised early-stage rounds of $100 million or more, altogether bringing in more than $4
Recipients of some of the largest rounds include:Ziroom, an apartment rental service provider based in Beijing, raised $621 million in its
Series A round.Black Fish, a consumer finance platform, raised a $145 million Series A round.Pony.ai, an autonomous vehicle startup with
significant operations in both Silicon Valley and China, raised a $112 million Series A.United States is no slouch in big A and B rounds,
previously, many of the largest early-stage round recipients are mature companies or spin-outs of mature companies
diseases.But while big rounds are still getting done, the number of United States early-stage rounds of all sizes has declined a bit over
Over the last two quarters, Crunchbase projects fewer than 900 early-stage rounds are closing quarterly
Globally, however, the number of early-stage rounds has been trending up:Part of the pattern is that the dynamics of early-stage funding
have changed over the years
In the past, Series A and B rounds were for startups to develop working prototypes, hone market segments to target and attract the earliest
Scaling on a national or international level was generally for later stages, after a company had proven demand and a working product.These
over a couple of short years, with big early-stage rounds all around
is the declining share of North American early-stage funding a source of worry for founders and investors in the region Or is it a
superior work ethic among Chinese entrepreneurs compared to their United States counterparts.Purely following the money, the takeaway is
this: Investors globally have decided the early-stage opportunity is a lot bigger than they thought a couple of years ago
And while investors are putting a bit more into mature ecosystems like the United States and Silicon Valley, they are putting a lot more
into China and other regions with underdeveloped venture markets relative to their size and technology prowess.
