Venture Capitalists Invest More Than $15 Billion in U.S. Startups

Venture capitalists invested more than $15.3 billion in U.S. startups during the last quarter, but with more than a third of that money going to two established tech giants, smaller startups are continuing to struggle this year to attract investors.

Startups raked in 20 percent more cash than they did during the first three months of the year, but the number of deals dropped for the fourth quarter in a row, according to an industry report released Thursday night. Analysts say private tech behemoths like San Francisco-based Uber, which long ago outgrew the size of a typical "startup," continue to suck up huge rounds of funding.

"The $1 billion rounds and whatnot, and the $100 million rounds coming into these unicorns -- just in terms of traditional venture and how the industry is geared -- is ludicrous," said Adley Bowden, vice president of venture capital database PitchBook.

That data come as the public market is buzzing over Thursday's debut of Japanese mobile messaging app Line, in the biggest IPO of 2016. After raising more than $1 billion when it priced its offering earlier this week, Line closed its first day of trading up more than 25 percent -- a success that experts hope will help jump-start this year's sluggish tech IPO market.

On the venture capital side, the top two deals of the quarter -- Uber raised $3.5 billion from Saudi Arabia's investment arm and Snapchat, based in L.A.'s Venice district, raised $1.3 billion -- accounted for nearly a third of all funds deployed, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters. San Diego-based biotech company Human Longevity had the third-largest round at $220 million, and San Francisco-based messaging platform Slack came in fourth, raking in almost $200 million.

Meanwhile money going to companies...

Comments are closed.