RISK: Investments in VC-backed companies dropped 30 percent in Q4 ’15: report

"We were surprised to see the pullback manifest itself so quickly..."

Investments in venture capital-backed companies pulled back in the last quarter of 2015 after three remarkably strong quarters, KPMG and CB Insights report.

On the whole, 2015 saw $128.5 billion invested in venture capital-backed companies, which marks a 44 percent hike from 2014.

But in Q4, investors put in $27.2 billion across 1,742 deals globally, a 30 percent decrease in funding from the previous quarter and the lowest deal activity since the first quarter of 2013.

“Sentiment and the outlook became very negative towards the latter part of Q3 which suggested we would see a slowdown,” says Anand Sanwal, CEO of CB Insights. “But we were surprised to see the pullback manifest itself so quickly–just one quarter later. This slowdown was not just for VC-backed companies at the late stages; while the Unicorns get a lot of attention, Q4’s data shows that it became harder for early-stage companies to raise money as well.”

 

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Transcontinental Media G.P.