Transcript Document

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
Venture Fundraising in U.S. Rises Significantly from 4Q 2013
FUNDRAISING
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.
U.S. VC Fundraising (2011 – 2014)
80
$12,00
Based on multiple closings
70
$10,00
60
$8,00
50
40
$6,00
30
$4,00
20
$2,00
10
0
1Q'11
Amount Raised ($B) $7,12
Number of Funds
40
2Q'11
$3,59
3Q'11
$2,92
4Q'11
$6,75
1Q'12
$7,45
2Q'12
$6,57
3Q'12
$5,03
4Q'12
$2,93
1Q'13
$4,56
2Q'13
$6,75
3Q'13
$4,07
4Q'13
$4,77
1Q'14
$9,64
44
50
52
55
46
53
51
56
57
67
73
73
$0,00
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Largest VC Funds Raised in 1Q 2014
VentureSource
FUNDRAISING
Firm Name
Fund Name
Amount ($M)
City
State
TCMI Inc.
Technology Crossover Ventures
VIII LP
$2,230.00
Palo Alto
CA
Andreessen Horowitz
Andreessen Horowitz Fund IV
LP
$1,500.00
Palo Alto
CA
Founders Fund Management
LLC
Founders Fund V LP
$1,015.20
San Francisco
Accel Partners
Accel Growth Fund III LP
$1,000.00
Lightspeed Venture Partners
Lightspeed Venture Partners X
LP
$1,000.00
Offering Status
Fund Type
Fund Category
Late-stage venture
capital
Venture Capital
Closed
Multi-stage venture
capital
Venture Capital
CA
Closed
Multi-stage venture
capital
Venture Capital
Palo Alto
CA
Closed
Late-stage venture
capital
Venture Capital
Menlo Park
CA
Closed
Multi-stage venture
capital
Venture Capital
Closed
Closing Type
Final
Final
Final
Final
Final
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VentureSource
U.S. Venture Investment on the Rise in 1Q 2014
FINANCING
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.
Equity Financings into U.S. –
based, VC-backed Companies
(2011 – 2014)
$12,00
1200
$10,00
1000
$8,00
800
$6,00
600
$4,00
400
$2,00
200
$0,00
0
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Amount Raised ($B) $8,13 $9,19 $10,68 $8,16 $7,51 $9,32 $7,81 $8,96 $7,48 $8,50 $9,18 $9,10 $10,74
Number of Deals
835
933
953
914
888
1005
904
896
891
914
903
956
862
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VentureSource
FINANCING
Equity Financings into U.S.–based, VC–backed Companies, by Round Class
(2011 – 2014)
Number of Deals
400
300
200
100
0
Restart
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
12
26
13
11
9
14
11
18
7
7
8
13
7
Later
271
286
296
292
252
307
281
282
263
287
272
277
282
Second
147
180
158
153
140
179
145
156
147
194
199
207
168
First
270
299
324
309
309
351
324
300
334
294
304
336
289
Seed
91
103
131
109
142
117
110
100
109
106
95
89
91
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VentureSource
FINANCING
Equity Financings into U.S.–based, VC–backed Companies, by Round Class
(2011 – 2014)
Amount Raised ($B)
$7,00
$6,00
$5,00
$4,00
$3,00
$2,00
$1,00
$0,00
Restart
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
$0,09 $0,40 $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 $4,60 $4,37 $4,39 $4,89 $4,75 $5,04 $5,79
Second $1,45 $1,90 $1,97 $1,54 $1,01 $1,56 $1,27 $1,43 $1,25 $1,69 $2,05 $1,79 $1,75
First
$1,30 $1,56 $2,10 $1,44 $1,41 $2,07 $1,38 $1,53 $1,53 $1,30 $1,45 $1,69 $1,44
Seed
$0,07 $0,10 $0,12 $0,10 $0,10 $0,09 $0,09 $0,08 $0,06 $0,08 $0,08 $0,05 $0,05
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VentureSource
FINANCING
Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M)
(2011 – 2014)
Median Equity Deal Size ($M)
$6,00
$5,00
$4,00
$3,00
$2,00
$1,00
$0,00
Median Equity Deal Size ($M)
1Q'11
$4,40
2Q'11
$5,00
3Q'11
$5,26
4Q'11
$4,00
1Q'12
$3,88
2Q'12
$4,70
3Q'12
$3,84
4Q'12
$4,27
1Q'13
$4,00
2Q'13
$5,00
3Q'13
$4,00
4Q'13
$4,15
1Q'14
$4,50
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VentureSource
Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (1Q 2014)
FINANCING
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.
$1.8 billion were raised by Consumer Services in 158 deals, a decrease of 15% in deal flow, while capital
invested went up by 10%.
1Q’14 Industry Breakdown
By Amount Raised ($B)
1Q'14 Industry Breakdown
By Number of Deals
Business and Financial Services
Business and Financial Services
210
246
Consumer Goods
24%
Consumer Goods
32%
Consumer Services
Consumer Services
38
Energy & Utilities
2%
19
Healthcare
1%
17%
158
171
Energy & Utilities
Healthcare
Industrial Goods & Materials
12
21%
3%
Industrial Goods & Materials
Information Technology
Information Technology
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Top 5 Deals into VC-backed Companies (1Q 2014)
VentureSource
FINANCING
Co. Name
Location
Cloudera Inc. Palo Alto, CA
Industry
Group
Industry
Segment
Industry Code
Brief Description
Close Date
Round Type
Raised
($M)
Round Investors
(* denotes lead)
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/
Tourism
Provider 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
Software
Provider of mobile video
communication and
messaging applications.
3/20/2014
Corporate
$215.00
Alibaba Group*
Biotechnology
Therapeutics
Developer of therapeutic
products for diseases that
require long-term chronic
treatment.
$200.00
Farallon Capital Management
LLC, Foresite Capital
Management LLC, Franklin
Resources Inc., New Leaf
Venture Partners, Quilvest
Ventures, RA Capital
Management LLC*
Intarcia
Therapeutics
Inc.
Boston, MA
Healthcare
Biopharmaceuticals
3/27/2014
r4th
10
VentureSource
FINANCING
Most Active Investors for U.S.-based, VC-backed Companies (1Q 2014)
30
27
27
25
21
20
20
Google Ventures
Kleiner Perkins
Caufield & Byers
20
15
10
5
0
New Enterprise
Associates
500 Startups LP
Khosla Ventures
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VentureSource
FINANCING
Alaska/ Islands
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Number of Deals in 1Q 2014
by Primary Region
Number of Deals
by Primary Region
Amount Raised ($B)
by Primary Region
1Q 2014
1Q 2014
2
166
17
47
38
80
321
28
35
47
73
$0.004
$1.28
$0.12
$0.24
$0.31
$1.26
$5.68
$0.16
$0.32
$0.29
$0.67
Amount Raised ($B) in 1Q 2014
by Primary Region
Alaska/Islands
Alaska/Islands
Mid-Atlantic
Mid-Atlantic
Midwest Central
Midwest Central
Midwest East
Midwest East
Mountain
Mountain
New England
New England
Northern California
Northern California
Pacific Northwest
Pacific Northwest
South Central
South Central
South East
South East
Southern California
Southern California
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VentureSource
FINANCING
San Francisco Bay Area
Boston Metro
New York Metro
Potomac
Los Angeles Metro
San Diego Metro
Orange County
Seattle Metro
Austin Metro
Dallas-Fort Worth
Chicago Metro
Number of Deals
by subregion
Amount Raised ($B)
by subregion
1Q 2014
1Q 2014
320
69
95
38
31
20
16
22
18
9
11
Subregion Breakout
Amount Raised ($B)
Subregion Breakout
Number of Deals
Amount Raised ($B) by Subregion
Number of Deals by Subregion
San Francisco Bay Area
320
Boston Metro
New York Metro
95
Potomac
38
Los Angeles Metro
31
20
Orange County
16
Seattle Metro
22
Austin Metro
Dallas-Fort Worth
Chicago Metro
18
9
11
San Francisco Bay Area
$5,67
Boston Metro
69
San Diego Metro
$5.67
$1.23
$0.93
$0.18
$0.21
$0.20
$0.19
$0.11
$0.21
$0.08
$0.13
$1,23
New York Metro
$0,93
Potomac
$0.18
Los Angeles Metro
$0,21
San Diego Metro
$0,20
Orange County
Seattle Metro
Austin Metro
$0.19
$0,11
$0.21
Dallas-Fort Worth
$0,08
Chicago Metro
$0.13
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VentureSource
VALUATIONS
Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M)
(2011 – 2014)
$45,00
$40,00
$35,00
$30,00
$25,00
$20,00
$15,00
$10,00
$5,00
$0,00
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Median Pre-money Valuation ($M) $20,27 $22,25 $28,50 $18,26 $18,05 $15,00 $29,88 $40,00 $10,49 $24,20 $17,00 $22,00 $35,00
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VentureSource
Venture M&A and IPO Market Activity in the U.S. during 1Q 2014
LIQUIDITY
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.
Exit Opportunities for U.S.
VC-backed Companies
(2011 – 2014)
1Q'14
4Q'13
3Q'13
2Q'13
1Q'13
4Q'12
3Q'12
2Q'12
1Q'12
4Q'11
3Q'11
2Q'11
1Q'11
0
IPOs
1Q'11
11
20
2Q'11
14
3Q'11
11
40
4Q'11
10
M&As
140
115
146
141
60
1Q'12 2Q'12
20
12
111
121
80
3Q'12
10
4Q'12
8
102
125
100
1Q'13
9
97
120
2Q'13 3Q'13
20
25
90
118
140
4Q'13
20
122
160
1Q'14
38
119
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VentureSource
U.S. VC-backed M&As (2011-2014)
LIQUIDITY
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.
U.S. VC-backed M&A Activity
(2011 - 2014)
$18,00
160
$16,00
140
$14,00
120
$12,00
100
$10,00
80
$8,00
60
$6,00
40
$4,00
$2,00
20
$0,00
0
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Amount Paid ($B) $11,74 $11,79 $13,55 $9,48 $10,46 $12,00 $11,70 $8,82 $5,47 $8,95 $10,74 $12,45 $17,07
Number of M&As
140
115
146
141
111
121
102
125
97
90
118
122
119
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VentureSource
Top 3 U.S. M&As (1Q 2014)
LIQUIDITY
Company
Name
Location
Brief Description
Industry Code
Industry
Segment
Industry
Group
Close Date
Round Type
Amount
Paid ($M)
Acquirer
Nest Labs Inc.
Palo Alto, CA
Manufacturer 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
Procurement/Supply
automotive marketplace.
Chain
Business Support
Services
Business and
Financial Services
1/3/2014
Acquisition
$1,800.00
Cox Enterprises
Software
Information
Technology
1/2/2014
Acquisition
$1,000.00
FireEye Inc.
Mandiant Corp.
Developer of threat
detection and response
Network/Systems
Alexandria, VA
security software and Management Software
services.
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VentureSource
U.S. VC-backed IPOs (2011-2014)
LIQUIDITY
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.
U.S. VC-backed IPO Activity
(2011 - 2014)
$9,00
40
$8,00
35
$7,00
30
$6,00
25
$5,00
20
$4,00
15
$3,00
10
$2,00
$1,00
5
$0,00
0
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Raised ($B) through IPO $0,77 $1,71 $0,43 $2,37 $1,42 $7,75 $0,81 $1,22 $0,64 $1,80 $2,22 $3,55 $2,94
Number of IPOs
11
14
11
10
20
12
10
8
9
20
25
20
38
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VentureSource
Top 3 U.S. IPOs (1Q 2014)
LIQUIDITY
Company
Name
Location
Brief Description
Industry Code
Industry
Segment
Industry
Group
Close Date
Round
Type
Raised through
IPO ($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
Services
Healthcare
3/14/2014
IPO
$177.60
NYSE: CSLT
Coupons.com Inc.
Mountain
View,
CA
Business Support
Services
Business and
Financial Services
3/7/2014
IPO
$168.00
NYSE: COUP
Biopharmaceuticals
Healthcare
2/13/2014
IPO
$162.35
TSE: M
Acucela Inc.
Seattle, WA
Provider of digital coupons. Advertising/Marketing
Developer of therapeutics to
treat and slow the
progression of sightthreatening ophthalmic
diseases.
Biotechnology
Therapeutics
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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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