Decacorns continue to get funding while the rest of the startup investing declines

If you look at the investment dollars for the last quarter, you might be surprised to see an uptick in deal volume. For all the gripes about sky-high valuations and bubble fears, it seems strange to see more money thrown at startups.

It turns out that it’s mainly the businesses that have already raised a lot of capital that continued to attract even more. While there was an increase in total funding, the number of deals saw a decline. In other words, massive funding rounds in “decacorns” like Snapchat are the reason that the dollar totals ticked up.

Specifically, the newly released report from CB Insights and KPMG shows that there was a 3% rise in global venture capital investment last quarter, rising to $27.4 billion.  Yet the number of global deals fell to 1886, the lowest seen since the second quarter of 2013, and down 6% from the prior quarter.

The “funding was propped up by mega deals,” said Anand Sanwal, founder and CEO of CB Insights. “Massive dollars to Uber, Didi, really are what skew the numbers.”

Yet the unicorns didn’t fare as well, with the report finding 35 deals above $100 million, down from 63 in the same period last year.

PwC and the National Venture Capital Association released a U.S. focused VC report last week, pulling data from Thomson Reuters. The study found that $15.3 billion was deployed in the second quarter, a 20% increase from the prior quarter. But the deal count was down 5%, due to the larger deal sizes.

“Great venture-backed companies continue to raise money privately at strong valuations,” said John Backus, managing partner at New Atlantic Ventures.  “I do not see this slowing down.”

And from someone who worked on the report, Tom Ciccolella, PWC’s VC leader says that the strong “appetite for private company investing” means there is “a lot more money in the system.”

He expects that we’re going to see more mega funding and delayed IPOs because these high valuation companies “can raise money in the private market, so they don’t need to access the public markets.”