Unicorns and bubble fears are making headlines, but private growth investment in tech actually declined in Q3 relative to the same period last year. The market is still active and healthy. Investment volume increased 18%. However capital committed dropped a bit as average round size contracted from $67M to $50M. Our numbers are growth deals – those over $15M – so it is not intended to capture angel, seed, typical Series A, etc. We track the volume of growth investing in North America and Europe.

The data from Q3 did affirm the long-term trend we see of the private market financing replacing the IPO as the common source of material growth capital. IPO volume contracted a bit, possibly influenced by negative market comments from Fed Chair Yellen and issuers not wanting to compete with Alibaba for portfolio manager’s capital and attention.

Issuers considering the public v private financing decision still have the private option, as supply remains strong. Private issuers were able to raise significant capital including DeliveryHero at $350M, Proteus Digital Health’s $172M, Lookout’s $150M, Nutanix’s $140M and Plural Sight’s $135M. These all compare favorably with a median IPO financing size of $91.6M in Q3 (Source: Renaissance Capital).