Last year’s record-breaking venture capital totals were in large part thanks to huge growth equity firms like Tiger Global and Coatue flooding more money than ever into the startup space.

We’ve already looked at how Coatue has slowed and SoftBank has had a rough year. One large firm not yet examined, however, has been Dragoneer. Because it has been so quiet recently, it is perhaps easy to overlook.

Dragoneer, which counts companies such as Alibaba, Slack and Uber among its previous investments, significantly ramped up its investing pace in 2021. That year, the San Francisco-based firm took part in 80 different announced fundraisings, with those rounds totaling a whopping $28 billion, according to Crunchbase data. 

Important to note, however: The amount any investor—including Dragoneer—invests as a specific stake in a round is not usually divulged.

Some of the large rounds Dragoneer took part in last year included:

• Co-leading Roblox’s $520 million Series H in January.
• Taking part in Databricks’ $1 billion Series G in February and $1.67 billion Series H in August.
• Co-leading Faire’s $596.2 million Series G in November.
• Taking part in Lacework’s $1.3 billion Series D, also in November.

This year has presented a very different story. The firm has dramatically pulled back as the venture market has continued to slow every month. Through nearly three quarters of this year, Dragoneer has made only 21 deals, with those rounds totaling just more than $4.1 billion, according to Crunchbase data. 

The firm has not taken part in an announced deal thus far in the third quarter.

That does not mean the firm has pulled out of deals, or even big deals. In January it led Lyra Health’s $235 million Series F, as well as SpotOn’s $300 million Series F in May. It also participated in Checkout.com’s $1 billion raise in January.

Unicorn hunting

However, Dragoneer is on pace to add the fewest number of unicorns to its portfolio since 2020, according to Crunchbase data. Last year, the firm was one of the top investors in bringing aboard $1 billion-plus companies when it added 35 to its portfolio. This year, that number stands at only eight, the same number it added in 2019.

The slowing pace—and price—of deals is not surprising considering the softening venture market witnessed through the course of this year, with many saying it really started in late 2021. Dragoneer’s numbers would seem to bear that out, as the total value of deals in Q1—which likely closed in Q4 of last year—was substantially down from any quarter in 2021.

Many firms—especially large growth equity firms that must find a balance between their private and public market investments—have significantly pulled back in the venture market this year as inflation, interest rates and geopolitical issues have roiled the economy.

Large, late-stage growth rounds have been most dramatically affected in the market—a spot where Dragoneer thrives—as investors seem unwilling to pay for high valuations.

Whether that will change and valuations will come down, or investors will re-open their wallets remains a question we may not have answers to until next year.

Dragoneer did not respond to requests for comment.

Methodology

The total dollar amount of rounds the firm participated in reflects the total investment in those rounds, not the particular firm’s stake in those rounds—which is normally not released. All numbers relating to deals and deal size are from Crunchbase data.

Further reading:

Illustration: Dom Guzman