Article hero

A strong start for 2018 with AI and mega-deals dominating

The release of the PwC | CB Insights MoneyTree™ Report for Q1 2018 saw a continuation of the trend for larger deals

3 minutes read

The release of the PwC | CB Insights MoneyTree™ Report for Q1 2018 saw a continuation of the trend for larger deals, with 34 capital raisings of US$100m or more by US VC-backed private companies. Investment in artificial intelligence reached record levels and overall funding was the highest in the last 15 years. Some of the highlights are detailed below:

Private market deal activity declines but value continues to increase

While deal activity declined slightly, value grew for the sixth consecutive quarter with US$21.1b invested in VC-backed US startups at an average deal size of US$20m. This was the largest quarter by value since the heyday of the 2000 Internet Bubble.

Shift towards later stage continues

The quarter also saw seed and early stage deals continue to decline as a share of overall activity, reaching a low point for the past eight quarters of 46% of all deals. Expanding their presence were expansion and later stage financings which grew to a recent high of 37% combined.

Focus on Artificial Intelligence grows

With experts continuing to converge on Artificial Intelligence (AI) as the next platform technology, US funding for AI has hit record levels. Q1 saw US$1.9b of financing across 116 deals.

Three of the biggest deals in AI were for:

  • UiPath – which recorded a US$153m Series B led by Accel Partners – a robotic process automation vendor that provides a software platform helping businesses automate tedious and repetitive tasks by letting software robots do the job
  • – which recorded a US$112m Series A led by Chinese VCs – a developer of AI-based robots designed for autonomous driving
  • Nuro – which recorded a US$92m Series A led by Greylock Partners – a developer of robotic solutions for local commerce including their first product, a self-driving vehicle for local goods transportation

Uber-deals continuing to happen

Three companies recorded US$500m plus deals in Q1 with familiar names leading the investments:

  • Uber – which raised US$1.25b from investors including Sequoia and SoftBank – amidst its continuing clearing of decks in preparation for an expected IPO in 2019
  • DoorDash – which raised US$535m with participation again from Sequoia and SoftBank – a competing service to Uber on the local delivery front
  • Moderna Therapeutics – which raised US$500m from investors including Sequoia China and Fidelity – a biotech company developing new drugs using a pioneering technique able to produce human proteins or antibodies within patient cells

Mega-deals remain strong despite slight decline

In Q1, there were 34 rounds of US$100m or more (a “mega-round”) in capital raising by US VC-backed private companies. This represented 34% of total funding, a decline after rising for the past four quarters to a peak of 42% last quarter.

Unicorn maternity ward remains busy

In the US there were five new unicorns born including UiPath, Intercom and DoorDash.

Global activity was strong but slightly off last quarter

Globally, US$46.5b was invested in VC-backed companies across 2,884 deals with Europe contributing US$4.8b and Asia financing US$19.1b. Deal activity and value was slightly off last quarter but remained strong when viewed across the last eight quarters.

Global uber-deals show importance of Asia and particularly China

Globally, the five largest deals of Q1 were dominated by Asia with three coming from China, one from Indonesia and Uber’s raising (detailed above) being the only US-based deal. The four Asian deals were:

  • Easyhome – which raised US$2.05b from investors including Alibaba and Sequoia China – is a home improvement and furniture chain operator in China with no obvious tech angle
  • GO-JEK – which raised US$1.5b from investors including and Tencent – is an Uber-clone focussed on the Indonesian market
  • Mobike – which raised US$1.0b from investors including Tencent – is the world’s largest station-less bike share service, based in China with operations in over 15 countries
  • Chehaoduo – which raised US$0.8b from investors including Sequoia – is a China-based used car trading platform


With a strong opening quarter for IPOs and a steady pipeline growing of private companies looking to IPO in Q2, it will be fascinating to see whether the rush to exit impacts upon private funding levels with a cohort of early stage investors finally seeing liquidity. Will they look to recycle funds and re-enter the market at the currently declining seed and early stages or will they be drawn in by the strong IPO performance recorded to date, and turn their focus to shorter term returns via later stage deals?

Like what you see? Sign up for our newsletter now!

Copyright © 2019 Alicorn. All Rights Reserved.