Venture capital (VC) firms reduced their investments in startups last year after the record year in 2015.
The dollar amount of VC funds received by startups in the United States fell by 20 percent in 2016, and the deal activity also tumbled 16 percent year-on-year, according to the Q4 2016 MoneyTree report by consulting firm PwC and research firm CB Insights.
“2016 was an interesting year because a lot of macro trends came together at the same time, which led to lower levels of investments, public offerings, acquisitions, and unicorns,” said Brian Mulvey, co-founder and managing partner at PeakSpan Capital, a venture capital firm.
Silicon Valley, home to the world’s hottest startups, was hit hard with a 28 percent drop in investment, despite substantial funds raised by Uber and Airbnb last year.
