Q2 2019 Global VC Report: total deal volume is up after several quarters but dollar volume growth remains stagnant, unlikely in 2019 to exceed the highs of 2018
For the global venture capital market, Q2 2019 breaks one trend and makes another. — Using data and projections from Crunchbase … Thanks: @holdenthepage
Context & Ripple Effects
Crunchbase's quarterly series had been charting an accelerating market: the Q2 2018 report logged deal volume up 18.8% QoQ — the fastest since Q1 2015 — with dollar volume up 26%, and by Q3 2018 full-year funding totals had already surpassed all of 2017, up 41.1% YoY. That made 2018 the high-water mark this new report measures against.
Q2 2019 breaks the pattern in one direction only: deal counts recover after several soft quarters, but dollar growth stalls, putting 2019 on track to fall short of 2018's totals. The divergence echoes the 2016 dynamic where mega-deals propped up dollars while deal counts fell — here inverted, with activity broadening while big checks thin out.
First-order effects
- Investors writing large late-stage checks lose momentum: with dollar volume stagnant against 2018's peak, the mega-round cadence that drove last year's 41.1% YoY surge is no longer carrying the market.
- Early-stage investors see a wider field — recovering deal volume means more rounds to compete for even as aggregate capital stays flat.
Second-order effects
- Flat dollars spread across more deals compresses average round size, pushing late-stage companies to raise earlier, in smaller tranches, or seek non-VC capital to sustain 2018-scale burn.
- Data providers like Crunchbase gain relevance as LPs and fund managers lean on quarterly benchmarks to time deployments into a market that is no longer uniformly rising.
Third-order effects
- If the volume-up/dollars-flat split holds through year-end, the structural story of 2019 is deconcentration: venture activity dispersing across many smaller rounds rather than pooling in a handful of mega-deals, reversing the 2016–2018 concentration pattern.
- A market that peaks on dollars before peaking on deal count sets up the next cycle's question — whether the broader base of funded companies can absorb follow-on capital once mega-round appetite returns.
The trend: Global venture funding is rotating out of its mega-deal-inflated 2018 peak toward a broader, smaller-round market, with deal count leading dollars out of the cycle.