Investors participated in a record 273 mega-rounds last year, according to the data provider Crunchbase. This year is on pace to easily eclipse that, with 268 completed in the first seven months of the year. In July, start-ups reached more than 50 financing deals worth a combined $15 billion, a new monthly high.
In the last 10 days, Letgo, an online classifieds ads company, raised $500 million. Actifio, a data storage company, took in $100 million. MyDreamPlus, a co-working space start-up, secured $120 million. And Klook, a travel activity booking site, got $200 million.
These mega-rounds have become so common that CB Insights, which tracks start-up investments, has even debated lifting its definition of a mega-round to $200 million or more, according to Anand Sanwal, the firm’s chief executive.
Many of the new investors, including SoftBank’s $93 billion Vision Fund, manage funds so large they dwarf the entire traditional venture capital market in the United States. These giant funds are looking for start-ups that can take large sums of money with one shot. Writing lots of small checks is too time-consuming, and the returns from small bets will not make a difference for a such a big fund. So investors are competing to back any start-up that shows promise and the ability to put $100 million or more to use.
“As soon as they feel like they have a winner, they will really put a lot of resources behind it,” said Mr. Sanwal of CB Insights.
SoftBank’s deal-making has affected every part of the venture capital market. The arrival of its Vision Fund, which has a minimum investment size of $100 million, has prompted a number of traditional venture capital firms, including Sequoia Capital, to build larger pools of money to compete. Funds from seven different firms are raising capital, according to the data provider Pitchbook.