VentureSource U.S. -- 1Q 2014
Dec 23, 2015
VentureSource
U.S. -- 1Q 2014
VentureSource The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. Highlights for 1Q 2014 include: U.S. venture capital fundraising doubles in amount raised, but number of funds remains level;
Venture capital investment was at its highest since 1Q 2001;
Median pre-money valuation increased 59% from 4Q 2014;
Venture-backed mergers and acquisitions (M&As) reach highest quarterly figure since 3Q 2000. Initial public offerings (IPOs), however, took a dip.
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VentureSource
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75U.S. VC Fundraising (2011 – 2014)Based on multiple closings
Venture Fundraising in U.S. Rises Significantly from 4Q 2013
73 funds garnered $9.6 billion in 1Q 2014, more than doubling the amount raised in the previous quarter, while number of funds remained stable.
Technology Crossover Ventures VIII LP was the largest U.S. venture capital fund of 1Q 2014 raising $2.2 billion and accounting for 23% of the total amount raised during the quarter.
Median U.S. fund size was $175 million.
FUNDRAISING
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VentureSource Largest VC Funds Raised in 1Q 2014
Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type
TCMI Inc. Technology Crossover Ventures VIII LP $2,230.00 Palo Alto CA Closed Late-stage venture
capital Venture Capital Final
Andreessen Horowitz Andreessen Horowitz Fund IV LP $1,500.00 Palo Alto CA Closed Multi-stage venture
capital Venture Capital Final
Founders Fund Management LLC Founders Fund V LP $1,015.20 San Francisco CA Closed Multi-stage venture
capital Venture Capital Final
Accel Partners Accel Growth Fund III LP $1,000.00 Palo Alto CA Closed Late-stage venture capital Venture Capital Final
Lightspeed Venture Partners Lightspeed Venture Partners X LP
$1,000.00 Menlo Park CA Closed Multi-stage venture capital Venture Capital Final
FUNDRAISING
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VentureSource
FINANCING
Equity Financings into U.S. – based, VC-backed Companies(2011 – 2014)
U.S. Venture Investment on the Rise in 1Q 2014
U.S.-based companies raised $10.7 billion from 862 venture capital deals in 1Q 2014, a 18% increase in capital and a 10% decline in number of deals from the previous quarter.
In contrast with 1Q’13, amount invested registered a 44% increase, while number of deals dipped 3%.
Information Technology (IT) and Business and Financial Services are the strongest sectors, respectively with 32% and 25% share of total amount invested.
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Amount Raised ($B)
8.13 9.19 10.68 8.16 7.51 9.32 7.81 8.96 7.48 8.5 9.18 9.1 10.74
Number of Deals
835 933 953 914 888 1005 904 896 891 914 903 956 862
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VentureSource
Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2011 – 2014)
Number of Deals
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Restart
12 26 13 11 9 14 11 18 7 7 8 13 7
Later
271 286 296 292 252 307 281 282 263 287 272 277 282
Second
147 180 158 153 140 179 145 156 147 194 199 207 168
First
270 299 324 309 309 351 324 300 334 294 304 336 289
Seed
91 103 131 109 142 117 110 100 109 106 95 89 91
50
150
250
350
FINANCING
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VentureSource
FINANCING
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Restart
0.09 0.4 0.23 0.08 0.09 0.16 0.23 0.68 0.08 0.17 0.08 0.22 0.29
Later
4.89 4.67 5.95 4.73 4.13 5.11 4.6 4.37 4.39 4.89 4.75 5.04 5.79
Second
1.45 1.9 1.97 1.54 1.01 1.56 1.27 1.43 1.25 1.69 2.05 1.79 1.75
First
1.3 1.56 2.1 1.44 1.41 2.07 1.38 1.53 1.53 1.3 1.45 1.69 1.44
Seed
0.068 0.1 0.12 0.1 0.1 0.09 0.09 0.08 0.06 0.08 0.08 0.05 0.05
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Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2011 – 2014)
Amount Raised ($B)
VentureSource
FINANCING
Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M) (2011 – 2014)
Median Equity Deal Size ($M)
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Median Equity Deal Size ($M)
4.4 5 5.26 4 3.88 4.7 3.84 4.27 4 5 4 4.15 4.5
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VentureSource
210
38
158
12
171
19
246
Business and Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (1Q 2014)
IT saw the largest investment allocation, with 246 deals garnering $3.4 billion and accounting for 32% of total equity investment.
The Business and Financial Services sector raised the second highest proportion of investment for 1Q’14: 210 deals accumulated $2.6 billion, up 15% in amount raised, but down 7% from respective 4Q’13 figures.
Healthcare placed third with $2.3 billion in 171 deals, a 1% drop from the previous quarter. The sector’s investment figure represents a 21% share of total equity investment into U.S. VC-backed companies for the quarter.
$1.8 billion were raised by Consumer Services in 158 deals, a decrease of 15% in deal flow, while capital invested went up by 10%.
1Q'14 Industry Breakdown By Number of Deals
1Q’14 Industry Breakdown By Amount Raised ($B)
FINANCING
9
24%
2%
17%
3%21%
1%
32%
Business and Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
VentureSource
Co. Name Location Industry Group
Industry Segment Industry Code Brief Description Close Date Round Type Raised
($M)Round Investors (* denotes lead)
Cloudera Inc. Palo Alto, CA Information Technology Software Database Software Provider of open source
database software. 3/31/2014 Corporate $740.00 Intel*
Lyft Inc. San Francisco, CA
Consumer Services Travel and Leisure
Travel Arrangement/
TourismProvider of an on-demand
ridesharing service platform. 3/10/2014 5th $250.00
Alibaba Group, Andreessen Horowitz, Coatue Management
LLC, Founders Fund Management LLC, Mayfield
Fund, Third Point Reinsurance Ltd.
AliphCom Inc. San Francisco, CA
Information Technology
Electronics and Computer Hardware
Consumer Electronics
Provider of audio and speech technologies and consumer
products for the mobile communications markets.
2/13/2014 Later $250.00 Rizvi Traverse Management LLC*
TangoMe Inc. Mountain View, CA
Information Technology Software Communications
SoftwareProvider of mobile video
communication and messaging applications.
3/20/2014 Corporate $215.00 Alibaba Group*
Intarcia Therapeutics
Inc.Boston, MA Healthcare Biopharmaceuticals Biotechnology
Therapeutics
Developer of therapeutic products for diseases that require long-term chronic
treatment.3/27/2014 r4th $200.00
Farallon Capital Management LLC, Foresite Capital
Management LLC, Franklin Resources Inc., New Leaf
Venture Partners, Quilvest Ventures, RA Capital Management LLC*
Top 5 Deals into VC-backed Companies (1Q 2014)
FINANCING
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VentureSource
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Ass
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es
500
Startu
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Khosla
Ven
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Goo
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Caufie
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3027 27
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Most Active Investors for U.S.-based, VC-backed Companies (1Q 2014)
FINANCING
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VentureSource
Amount Raised ($B) in 1Q 2014 by Primary Region
Number of Dealsby Primary Region
1Q 2014
2
166
17
47
38
80
321
28
35
47
73
Alaska/ Islands
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Amount Raised ($B)by Primary Region
1Q 2014
$0.004
$1.28
$0.12
$0.24
$0.31
$1.26
$5.68
$0.16
$0.32
$0.29
$0.67
Alaska/Islands
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Number of Deals in 1Q 2014 by Primary Region
FINANCING
12
Alaska/Islands
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
VentureSource
Chicago Metro
Dallas-Fort Worth
Austin Metro
Seattle Metro
Orange County
San Diego Metro
Los Angeles Metro
Potomac
New York Metro
Boston Metro
San Francisco Bay Area
$0.13
$0.08
$0.21
$0.11
$0.19
$0.20
$0.21
$0.18
$0.93
$1.23
$5.67
Amount Raised ($B) by Subregion
Subregion BreakoutAmount Raised ($B)
Number of Deals by subregion
1Q 2014
Amount Raised ($B) by subregion
1Q 2014
Subregion BreakoutNumber of Deals
Chicago Metro
Dallas-Fort Worth
Austin Metro
Seattle Metro
Orange County
San Diego Metro
Los Angeles Metro
Potomac
New York Metro
Boston Metro
San Francisco Bay Area
11
9
18
22
16
20
31
38
95
69
320
Number of Deals by Subregion
FINANCING
13
San Francisco Bay Area 320 $5.67Boston Metro 69 $1.23New York Metro 95 $0.93Potomac 38 $0.18Los Angeles Metro 31 $0.21San Diego Metro 20 $0.20 Orange County 16 $0.19Seattle Metro 22 $0.11Austin Metro 18 $0.21Dallas-Fort Worth 9 $0.08Chicago Metro 11 $0.13
VentureSource
VALUATIONS
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Median Pre-money Valuation ($M)
20.27 22.25 28.5 18.26 18.05 15 29.88 40 10.49 24.2 17 22 35
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$37.50
$42.50
Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M) (2011 – 2014)
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VentureSource
LIQUIDITY
Exit Opportunities for U.S. VC-backed Companies (2011 – 2014)
Venture M&A and IPO Market Activity in the U.S. during 1Q 2014
Mergers and acquisitions (M&As) of venture-backed companies decreased by 2% from 4Q 2013, with 119 deals garnering $17 billion.
38 venture-backed IPOs took place during 1Q 2014, the highest figure in a quarter since 3Q 2000 when 75 were completed.
1Q'11
2Q'11
3Q'11
4Q'11
1Q'12
2Q'12
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
10 30 50 70 90 110 130 150
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
IPOs 11 14 11 10 20 12 10 8 9 20 25 20 38
M&As 140 115 146 141 111 121 102 125 97 90 118 122 119
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VentureSource
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Amount Paid ($B)
11.74 11.79 13.55 9.48 10.46 12 11.7 8.82 5.47 8.95 10.74 12.45 17.07
Number of M&As
140 115 146 141 111 121 102 125 97 90 118 122 119
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150U.S. VC-backed M&A Activity (2011 - 2014)
U.S. VC-backed M&As (2011-2014)
119 M&As of venture-backed companies in U.S. garnered $17 billion during 1Q 2014, the highest quarterly figure since 3Q 2000, when $23 billion were raised.
In contrast with 4Q 2013, when a total of 122 transactions accumulated $12 billion, though the number of M&As fell by 2%, the amount raised rose by 37%.
The largest M&A of the quarter was Nest Labs Inc., which was acquired by Google Inc. (Nasdaq: GOOG) for $3.2 billion.
LIQUIDITY
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VentureSource Top 3 U.S. M&As (1Q 2014)
Company Name Location Brief Description Industry Code Industry
SegmentIndustry Group Close Date Round Type Amount
Paid ($M) Acquirer
Nest Labs Inc. Palo Alto, CAManufacturer of energy efficient home products, such as thermostats and
smoke alarms.
Appliances/Durable Household Goods
Household and Office Goods Consumer Goods 2/7/2014 Acquisition $3,200.00 Google Inc.
AutoTrader.com Inc. Atlanta, GA Provider of a digital
automotive marketplace.Procurement/Supply
ChainBusiness Support
ServicesBusiness and
Financial Services 1/3/2014 Acquisition $1,800.00 Cox Enterprises
Mandiant Corp. Alexandria, VADeveloper of threat
detection and response security software and
services.
Network/Systems Management Software Software Information
Technology 1/2/2014 Acquisition $1,000.00 FireEye Inc.
LIQUIDITY
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VentureSource
U.S. VC-backed IPO Activity (2011 - 2014)
U.S. VC-backed IPOs (2011-2014)
38 venture-backed companies raised $2.9 billion through public offerings in 1Q 2014. Number of deals increased by 90%, while capital raised registered a 17% decrease from the previous quarter.
The largest IPO of the quarter was Castlight Health Inc. (NYSE: CSLT), which completed a $178 million IPO.
1Q'11
2Q'11
3Q'11
4Q'11
1Q'12
2Q'12
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
1Q'11
2Q'11
3Q'11
4Q'11
1Q'12
2Q'12
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
Raised ($B) through IPO
0.767 1.71 0.43 2.37 1.42 7.75 0.81 1.22 0.64 1.8 2.22 3.55 2.94
Number of IPOs
11 14 11 10 20 12 10 8 9 20 25 20 38
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2.57.512.517.522.527.532.537.5
LIQUIDITY
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VentureSource
Company Name Location Brief Description Industry Code Industry
SegmentIndustry Group Close Date Round
TypeRaised through
IPO ($M) Exchange
Castlight Health Inc.
San Francisco, CA
Provider of cloud-based software that attempts to help enterprises manage
health care costs.
Clinical Decision Support
Medical Software and Information
ServicesHealthcare 3/14/2014 IPO $177.60 NYSE: CSLT
Coupons.com Inc. Mountain View, CA Provider of digital coupons. Advertising/Marketing Business Support
ServicesBusiness and
Financial Services 3/7/2014 IPO $168.00 NYSE: COUP
Acucela Inc. Seattle, WA
Developer of therapeutics to treat and slow the
progression of sight-threatening ophthalmic
diseases.
Biotechnology Therapeutics Biopharmaceuticals Healthcare 2/13/2014 IPO $162.35 TSE: M
Top 3 U.S. IPOs (1Q 2014)
LIQUIDITY
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VentureSource
ABOUT US
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.
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