Thanks to five deals of more than $20 million each, venture capital activity in Austin stayed strong in the second quarter.
A total of $306.6 million was raised by 37 companies during the quarter, according to a survey by PricewaterhouseCoopers and CB Insights.
That’s a 76 percent decrease from first quarter, but the first-quarter performance was skewed by a whopping $250 million investment in Austin-based WP Engine.
Excluding the WP Engine deal, 28 Austin companies received $290.6 million in the first quarter.
Nationwide, venture investing remained robust, with $23 billion put into 1,416 deals, representing a 2 percent increase from the first quarter.
San Francisco posted the highest number of deals, with 271 investments bringing in a total of $5.6 billion. Silicon Valley reported 166 deals collecting $3.9 billion.
“Deal activity looks to be resurgent with $23 billion invested in VC-backed startups setting a new quarterly funded record, while also increasing activity to over 1,400 deals,” said Tom Ciccolella, PricewaterhouseCooper’s U.S. Venture Capital Leader. “Additionally, 2018’s mega-rounds are currently on pace to beat what was an unprecedented 2017 -- which posted 111 mega-rounds.”
Mega-deals are defined as a company receiving an investment of $100 million or more in a quarter. There were 45 mega-rounds nationwide in the second quarter.
Nationally, artificial intelligence and financial technology saw significant increases in deals and dollars. Austin has had a number of deals in those sectors in 2018, including Ojo Labs, which in May received $20.5 million to roll out its products.
Ojo Labs is using AI to connect businesses to consumers, and will target real estate, finance and home service.
John Cummins, a partner with PricewaterhouseCoopers in Austin, said it’s good to see Austin founders starting promising companies in areas that investors are seeking to invest.
“What we would hope to see is that parts of the market that money is flowing to will be replicated in Austin,” he said. “That means the Austin market gets an equal shot at funding as the East Coast and West Coast.”
In Austin, the internet industry remained the single largest investment sector in the second quarter, with $146.7 invested in 20 deals.
The biggest Austin investment during the quarter was an internet deal: BigCommerce, which provides e-commerce software, received $64 million from investors Goldman Sachs, General Catalyst, GGV Capital and Tenaya Capital.
The company sells software that lets businesses build online stores, accept payments from a variety of methods and track sales and shipping. It has raised $200 million since its founding in 2009.
BigCommerce CEO Brent Bellm said the new funding will help the company challenge much larger rivals such as Oracle, IBM, Salesforce and SAP.
"Having a funding round like this from such major investors really solidifies our credibility as a disrupter in the industry," Bellm said. "We now have the financial backing to go head-to-head with the other global leaders in e-commerce and signal to the world.”
The top 10 Austin deals in the second quarter:
BigCommerce, e-commerce software, $64 million
Dosh, provides an app for finding cash and deals, $44 million
Nulo Pet Food, pet nutrition company, $28.4 million
Ojo Labs, provides an AI assistant for home buyers, $20.5 million
High Brew Coffee, ready-to-drink cold brew coffee, $20 million
TrendKite, helps clients gauge effectiveness of public relations, $16.7 million
101 Commerce, invests in and builds Amazon private label brands, $12.75 million
Ambiq Micro, ultra-low power integrated circuits, $11.4 million
Convey, software that lets online retailers manage logistics, $10 million
Arrive Logistics, freight brokerage startup, $10 million
Source: MoneyTree report from PricewaterhouseCoopers and CB Insights
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