2016 is shaping up to be an excellent year for the US tech sector, with US startups receiving a massive 15.3 billion USD in investment from venture capitalists in the first quarter of this year alone. This represents a 20 percent increase over the first quarter of the year, although the number of deals dropped.
The biggest deal of the quarter was the 3.5 billion USD investment into Uber Technologies Inc. by Saudi Arabia’s investment arm. Snapchat took home the second-largest investment, at 1.3 billion USD. Biotech company Human Longevity’s funding round closed at 220 million USD, while messaging platform Slack brought in nearly 200 million USD.
According to Adley Bowden, Vice President of PitchBook, “The 1 billion USD rounds and whatnot, and the 100 million USD rounds coming into these unicorns – just in terms of traditional venture and how the industry is geared – is ludicrous.”
The massive influx in venture capital flooding the US tech sector is concentrated in certain cities – including San Francisco and Silicon Valley, the latter of which saw 8.2 billion USD of venture capital being poured into startups in Q2 2016 – up from 4.9 billion USD in Q1 2016.
Garvis Toler, Global Head of Capital Markets for the New York Stock Exchange, points out that though the public markets remain in turmoil following Brexit and troubled by China’s economic slowdown, they appear to be stabilising.
Middle Eastern investors are seizing this window of opportunity to ramp up their overseas investments, including participation in funding rounds for tech startups in the US.
Naseba is a deal facilitator that has spent over a decade building a network of contacts with investors based around the world – including the Middle East. This network includes family offices, sovereign wealth funds, investment firms, high net worth individuals and members of royalty. Our investor analyst team is currently sourcing US-based technology investment opportunities on behalf of these investors.
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