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We analyzed the terms of 189 venture financings closed in the third quarter of 2019 by companies headquartered in Silicon Valley. The quarter recorded the highest average price increase since mid-2015. The software and internet/digital media industries were again the industries with the two strongest valuation results in the quarter.
Valuation Results Have Plateaued in 2019
- Valuation results remained strong in Q3 2019, but, aside from a spike in the average price increase in the quarter, have largely plateaued in 2019.
- Up rounds exceeded down rounds 81% to 7%, with 12% flat in Q3 2019, a decline from Q2 2019 when up rounds exceeded down rounds 86% to 6%, with 8% flat.
- The Fenwick & West Venture Capital Barometer™ showed an average price increase in Q3 of 88%, an increase from the 77% recorded in the prior quarter, and the highest average price increase since Q3 2015.
- Following four consecutive quarters of increases, the median price increase of financings declined moderately from 58% in Q2 to 54% in Q3.
Series B and C Financings Valuations Were Stronger
- Similar to the prior quarter, valuation results for Series B and C financings were stronger compared to the previous quarter, while valuation results for Series D and E financing rounds weakened further.
Software and Internet/Digital Media Industries Showed Strongest Valuations
- The software and internet/digital media industries both recorded stronger valuation results in Q3 compared to the prior quarter and were again the industries with the two strongest valuation results in the quarter.
- The hardware industry recorded a considerably higher average price increase in Q3 compared to the prior quarter, while the median price increase for the industry declined.
- The valuation results for the life sciences industry in Q3 lagged those for the other industries and declined compared to the prior quarter
Download the full report covering top-line trends for venture capital financings of Silicon Valley companies in Q3.
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