Venture capital just had its highest spending year in history.

The amount of money firms spent on private companies hit a new all-time record in 2018— well above the previous watermark from the dotcom boom.

Last year, venture capital firms spread roughly $131 billion across 8,949 deals, according to data published by PitchBook and the National Venture Capital Association Thursday. The previous record was a $100 million total notched in the year 2000.

Although the dollar amount jumped by more than 57 percent from $83 billion last year, the number of deals went down. Deal count fell by about 5 percent this year from a roughly 9,400 total last year.

Cameron Stanfill, PitchBook venture analyst who co-authored the report, said sky-high price tags for start-ups accounted for the new record total despite having fewer deals.

"There is a lot of money competing for a finite amount of companies, and that's pushing prices up," Stanfill told CNBC in a phone interview.

More than 61 percent of total capital invested came from deals sized at $50 million or larger. This boosted the average deal size and valuations across every investment stage and series last year, according to the report. But because venture investors are paying so much up front, it's becoming harder to profit.

"If an investor has to put in more money a into an initial equity investment at a higher valuation, they'll have to grow that business way more to get the same returns they were used to getting 10 years ago," Stanfill said.