Venture capital transactions declined in October to hit the lowest level this year, though a pickup in Series A deals holds out hope for startups looking to raise their first institutional round of funding.
The total number of venture deals in October fell to 21 after rising for two months, according to VCCEdge, the data research platform of News Corp VCCircle. The total deal value dropped to $153.27 million, the third-lowest this year, after hitting a peak of $300.05 million in September.
The drop in venture capital transactions is in contrast to the spike in angel and seed funding deals to a six-month high in October.
VCCEdge data show also that the number of Series A deals increased in October to 12 from nine in September. The deal value at $58.41 million during the month is also the highest so far this year, diluting the overall pain in dealmaking.
“Series A is the lead indicator of any pickup in the venture space,†said Sunil Goyal, founder and CEO of YourNest, which mainly chases pre-Series A deals. “A sustained growth in the number of Series A rounds over the next few months with a median size of around $5 million shall be encouraging for startups,†he added.
Series A deals are crucial for startups as these are the first institutional rounds of funding and bring a larger stash of capital compared with angel or seed rounds. It also sets the stage for bankrolling bigger expansion plan for a startup.
The largest Series A deal during the month was the $20.94 million investment in renewable energy solutions provider Ezon Energy from Japanese investor Natori Nohisa. This was followed by $7 million investment in Postdot Technologies by Nexus India Capital and $6 million investment in Mpower Financing by IIFL Seed Ventures.
The number of mid-stage deals (Series B and C) during October stayed the same as the previous two months while there was only one late-stage deal (Series D and E), which had spiked in September and pushed the overall deal volume.
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