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Transcript of MoneyTree Report Q2 2019 - Amazon Web Services...Source: PwC / CB Insights MoneyTree Report Q2 2019...

  • MoneyTree™ Report

    Q2 2019

  • 2

    Executive summary Q2 2019

    $100M+ deals continue to elevate US VC funding levels, with total funding on track to push records again.At the 2019 halfway point, US VC funding shows no signs of slowing: At the end of Q2, US VC funding was at $55B, well above the mid-point for 2018 ($48B), which ultimately saw a near-record $116B raised (compared to the record$120B in 2000). $100M mega-rounds drive funding higher: Driving thetrend toward bigger deals, US companies raised a recordquarterly number of $100M+ VC rounds in Q2, with 64 mega-rounds accounting for nearly half of all funding raised. Seed rounds fluctuate to lowest activity in six years: After rebounding last quarter, Seed activity dropped below levels last seen in Q1’14. US produces 19 new unicorns: 19 US VC-backed companiessaw their valuations rise to $1B+, nearing the record set in Q4’18 of 22 new unicorns.

    Q2 2019 funding across North America, Asia, and Europeremains relatively flat.North America, Asia, and Europe combined funding hits $53B: Total annual VC funding decreased by 2% from Q1 2019 totals. Deal activity increased by 2%, to 3,474 transactions.Asia deal activity retreats behind North America: While Asia came close to surpassing North America’s deal activity in Q3 2018, the region’s deal activity has since declined by 24% from Q3’18 to Q2’19.

    San Francisco Bay Area deal activity rebounds: After 3 consecutive quarters of decline, deal activity increased 17% to 438 transactions in Q2 2019. After record quarterly funding of $25B in Q3 2018, dollar funding has since stabilized to $13B.New York Metro sees slight decline in deal and dollar funding activity: After deal activity rebounded by 29% in Q1 2019, it declined by 8% in Q2 2019 to 212 transactions. Similarly, dollar funding declined by 9% in Q2 2019.

    Geographic InsightsUS Insights

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 3

    1,5871,465

    1,5731,683

    1,4841,378 1,362 1,409

    20.7 20.223.1 24.6

    29.3

    39.0

    26.128.7

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Q2 investments rise after fall from funding record set in Q4’18US deals and dollars – Quarterly

    Record funding

    (all-time)

    Investments ($B) # of deals

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 4

    8,314

    1,8923,423

    6,268 6,118

    2,771

    2019 YTD US funding is strongUS deals and dollars – Annual

    201020052000 2015 2019 YTD

    $120

    $55

    Recordfunding

    (all-time)

    Investments ($B) # of deals

    $116Record funding(this century)

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 5

    2019 records the largest first half this centuryUS funding – Quarterly seasonality

    $8.2 $12.3$18.9 $16.6 $16.0

    $23.1 $26.1$9.0$16.9

    $20.8 $18.6 $19.7$24.6 $28.7

    $9.1

    $14.0

    $20.8$15.8 $20.7

    $29.3

    $10.1

    $17.5

    $17.6

    $12.1$20.2

    $39.0

    Record annual funding(this century)

    Record first half funding(this century)

    Q3Q2Q1 Q4 TotalInvestments ($B):

    20172016201520142013 2018 2019 YTD

    $36.4

    $116.0

    $76.6

    $63.1

    $78.1

    $60.7$54.8

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 6

    Seed deal activity fluctuated down to its lowest level in six yearsDeal activity by round

    Note: All deals include additional round types

    1,247 All deals

    554

    105

    70

    330 SeriesA

    113 Series C

    60 Series E+

    1,183

    364 Seed292

    Q1 2019

    Q1 2014

    Q1 2015

    Q1 2016

    Q1 2017

    Q1 2018

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 7

    SeriesA$8.0M

    $2.0M $2.2M Seed

    Overall median deal size jumped 26% to $7.6M from Q1’19Median deal size by round

    Overall$7.6M

    $26.3M Series C

    $0.6M

    $3.8M

    $9.0M

    Note: Overall median includes additional round types

    Q1 2019

    Q1 2014

    Q1 2015

    Q1 2016

    Q1 2017

    Q1 2018

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 8

    31 35 33

    4855

    51 48

    64

    Q2’19 saw a record number of $100M+ funding roundsMega-rounds – Investments and deal counts

    $8.2 $7.6 $7.9 $8.2

    $14.6

    $24.7

    $11.9 $13.4

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Recordmega-rounds

    (all-time)

    Recordmega-round investments

    (all-time)

    Mega-round investments ($B) # of Mega-rounds

    Note: Mega-rounds are $100M deals or larger

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 9

    40% 38%34% 33%

    50%

    63%

    46% 47%

    Mega-rounds maintain a high percentage of all dealsMega-rounds – Funding and share of deals

    $8.2 $7.6 $7.9 $8.2 $14.6

    $24.7

    $11.9 $13.4

    $11.5 $12.5$12.3 $12.3

    $14.7

    $15.8

    $13.9 $13.2

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Recordmega-round

    share(all-time)

    Mega-round investments ($B) Non mega-round investments ($B) Mega-round share

    Note: Mega-rounds are $100M deals or larger

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 10

    US $100M+ rounds are on track to set records againMega-rounds – Quarterly seasonality

    $1.2

    $2.9$6.9

    $4.3 $4.4$7.9

    $11.9$0.9 $4.4

    $7.3 $7.4 $7.0

    $8.2 $13.4

    $0.8 $3.5

    $7.8 $4.9

    $8.2

    $14.6

    $1.2 $6.9

    $6.2

    $2.1

    $7.6

    $24.7

    2013 2014 2015 2016 2017 2018 2019 YTD

    Record annualmega-round

    funding(all-time)

    Record quarterly mega-roundfunding(all-time)

    $4.1

    $55.4

    $27.2

    $18.7

    $28.2

    $17.7

    $25.3

    Q3Q2Q1 Q4 TotalInvestments ($B):

    Note: Mega-rounds are $100M deals or larger

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 11

    Sector Deals Funding

    1 Internet $12.0B

    2 Healthcare $4.6B

    3 Mobile & Telecommunications $3.1B

    4 Software (non-internet/mobile) $2.7B

    5 Consumer Products & Services $.7B52

    132

    167

    221

    620

    Internet companies raised the most funding rounds of any sectorDeals and dollars – US sectors

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 12

    Q2 2019 saw one $1B+ funding round (13th largest of all time)Largest US deals of Q2 2019

    Company Investment Round Select investors Vertical

    1 Cruise AutomationSan Francisco, CA

    $1.15B Corporate Minority

    General Motors Automotive & Transportation

    2 DoorDashSan Francisco, CA

    $600M Series E+ Coatue Management, Darsana Capital Partners, Dragoneer Investment Group

    Internet

    2 UiPathNew York, NY

    $600M Series D+ Accel, capitalG, Coatue Management, Dragoneer Investment Group

    Software

    3 SpaceXHawthorne, CA

    $536M Other Undisclosed Industrial

    4 SoFiSan Francisco, CA

    $500M Series E+ Marketplace Funds, Qatar Investment Authority, Third Point Ventures

    Internet

    4 UberSan Francisco, CA

    $500M Corporate Minority

    PayPal Mobile & Telecommunications

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 13

    Company Funding Vertical Emerging areas Select investors

    1 Juul LabsSan Francisco, CA

    $13.6B Consumer Products & Services Consumer Hardware

    Coatue Management, D1 Capital Partners, Tiger Global Management

    2 WeWorkNew York, NY

    $6.6B Business Product & Services Co-Working & Co-Living Spaces

    T. Rowe Price, Benchmark Capital,Softbank Group

    3 AirbnbSan Francisco, CA

    $3.4B InternetE-Commerce

    On-Demand Sequoia Capital, Andreessen Horowitz,Greylock Partners, General Catalyst

    4 SpaceXHawthorne, CA

    $2.7B IndustrialAerospace & Defense

    Space Tech Founders Fund, Threshold Ventures, Fidelity Investments, Google

    5 Magic LeapPlantation, FL

    $2.6B Software (non-internet/mobile)Scientific, Engineering Software

    AR/VR Alibaba Group, Fidelity Investments, Google

    Juul moves into the #1 spot following Uber’s IPOTop 5 funded US companies – Q2 2019

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 14

    Q2’19 saw new US unicorns at near-record levelsUnicorns – New US VC-backed unicorns by quarter

    8 7 7 8

    1922

    1619

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Record new unicorns(all-time)

    Note: Unicorns are startups valued at $1B or more

    US VC-backed unicorn births

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 15

    Record population(all-time)

    Unicorn population remains at record level, despite recent exitsUS unicorn population

    108 111 114 114127

    143157 167

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Unicorn population count

    Note: Unicorns are startups valued at $1B or more

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 16

    Record aggregate unicorn valuation

    (all-time)

    Unicorn valuations ($B)

    $376.9 $378.8 $402.9 $412.3

    $473.3

    $575.6 $603.3 $552.9

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Total value of US unicorns fell from record highs in Q1’19Unicorns – US aggregate unicorn valuation

    Note: Unicorns are startups valued at $1B or more

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 17

    Company Valuation Vertical Emerging areas Select investors

    1 Juul Labs San Francisco, CA

    $50.0B Consumer Products & ServicesConsumer Electronics

    Consumer Hardware

    Coatue Management, D1 Capital Partners, Tiger Global Management

    2 WeWorkNew York, NY

    $47.0B Business Product & Services Co-Working & Co-Living Spaces

    T. Rowe Price, Benchmark Capital,Softbank Group

    3 AirbnbSan Francisco, CA

    $29.3B Internet On-Demand General Catalyst Partners,AndreessenHorowitz, ENIAC Ventures

    4 StripeSan Francisco, CA

    $22.5B Internet Fin Tech Khosla Ventures, Lowercase Capital,capitalG

    5 SpaceXHawthorne, CA

    $18.5B IndustrialAerospace & Defense

    Space Tech Founders Fund, Threshold Ventures, Fidelity Investments, Google

    Juul replaces Uber as the most highly valued VC-backed companyTop 5 highest valued US unicorns — Q2 2019

    Note: Unicorns are startups valued at $1B or more

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 18

    7.9

    6.7 6.6 6.8 6.27.1

    6.3

    7.5

    149 157165

    179162

    183162 163

    Q3‘17 Q4‘17 Q1‘18 Q2‘18 Q3‘18 Q4‘18 Q1'19 Q2'19

    Time-to-liquidation reaches highest level since Q3 2017 US M&A exits — Quarterly

    Note: Median years to liquidate from first funding

    Record exits

    (all-time)

    M&A exits Years

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 19

    11

    24

    13

    32

    25

    16 15

    33

    Q3‘17 Q4‘17 Q1‘18 Q2‘18 Q3‘18 Q4‘18 Q1'19 Q2'19

    5.8

    8.8

    4.5

    6.77.1 7.4

    5.4

    7.39th fastest(this century)

    8thhighest(ever)

    IPO activity Years to IPO

    US IPO exits reach 8-quarter record in Q2’19 US IPOs — Quarterly

    Note: Median years to liquidate from first funding

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 20

    7.96.7 6.6 6.8

    6.27.1

    6.37.5

    5.8

    8.8

    4.5

    6.7

    7.1 7.4

    5.4

    7.3

    Q3 ‘17 Q4 ‘17 Q1 ‘18 Q2 ‘18 Q3 ‘18 Q4 ‘18 Q1'19 Q2'19

    Time-to-liquidation converges for M&A and IPO exitsM&A exits and IPOs combined — Time-to-liquidation

    Years to M&A Years to IPO

    Note: Median years to liquidate from first funding

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 21

    149 157165 179 162

    183162 163

    1124 13

    3225

    1615 33

    Q1’18 Q2’18 Q3’18Q4’17Q3’17 Q1’19Q4’18 Q2’19

    Q2’19 M&A exits nearly flat, but IPOs more than double from Q1M&A exits and IPOs combined — Number of exits

    IPO exitsM&A exits

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 22

    Internet and Healthcare sectors dominate the top dealsTop 5 M&A exits of Q2 2019

    Company Last round Valuation Verticals Select prior investors Buyer

    1 LookerSanta Cruz, CA

    Series E $2.6B Internet Redpoint Ventures, Goldman Sachs, First Round Capital

    Google

    2 Peloton TherapeuticsDallas, TX

    Series E $2.2B Healthcare BVF Partners, Foresite Capital, Nextech Invest

    Merck & Co.

    3 Harry’s Razor CompanyNew York, NY

    Series D $1.4B Internet Tiger Global Management, Thrive Capital, Temasek Holdings

    EdgewellPersonal Care Co.

    4 KyribaSan Diego, CA

    Series E $1.2B Internet Upfront Ventures, Iris Capital, HSBC Venture Capital

    Bridgepoint

    5 Paragon BioservicesBaltimore, MD

    Series B $1.2B Healthcare Camden Partners, NewSpringHoldings

    Catalent

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 23

    San Francisco Bay Area sees continued surge of top IPOsTop 5 IPOs of Q2 2019

    Company Last round Valuation Verticals Select prior investors

    1 UberSan Francisco, CA

    Corporate Minority

    $75.5B Mobile & Telecommunications SoftBank Group, DiDi Chuxing, Barclays Bank, Citigroup, Goldman Sachs

    2 Slack TechnologiesSan Francisco, CA

    Series H $15.7B Internet Atlassian, Accel, GGV Capital, Comcast Ventures, Index Ventures

    3 Pinterest San Francisco, CA

    Series H $12.7B Internet Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital

    4 Zoom Video CommunicationsSan Jose, CA

    Series D $9.2B Internet Sequoia Capital, Emergence Capital, Qualcomm Ventures

    5 Adaptive BiotechnologiesSeattle, WA

    Corporate Minority

    $2.4B Healthcare Labcorp, Viking Global Investors, Tiger Management Corp

  • 24Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Three top metros raise notably more rounds in Q2’19Top 10 Metros by deal activity

    #1 San Jose-San Francisco-Oakland, CA#2 New York-Newark, NY-NJ-CT-PA#3 Boston-Worcester-Providence, MA-RI-NH-CT#4 Los-Angeles-Long Beach, CA#5 Seattle-Tacoma, WA#6 Denver-Aurora, CO#7 Austin-Round Rock, TX#8 Washington-Baltimore-Arlington, DC-MD-VA-WV-PA#9 San Diego-Carlsbad, CA#10 Chicago-Naperville, IL-IN-WI

  • 25Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Eight top metros raise more capital in Q2’19Top 10 Metros by investments

    #1 San Jose-San Francisco-Oakland, CA#2 New York-Newark, NY-NJ-CT-PA#3 Boston-Worcester-Providence, MA-RI-NH-CT#4 Los-Angeles-Long Beach, CA#5 San Diego-Carlsbad, CA#6 Seattle-Tacoma, WA#7 Chicago-Naperville, IL-IN-WI#8 Salt Lake City-Provo-Orem, UT#9 Denver-Aurora, CO#10 Raleigh-Durham-Chapel Hill, NC

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 26

    120

    103

    119115

    102 105

    74

    87

    $1.3$0.9

    $1.8 $1.7

    $0.6

    $2.0$1.6 $1.6

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Quarterly deals rebound after sharp declineLA Metro deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 27

    One mega-round eclipses other top LA dealsTop 5 LA Metro dealsCompany Investment Round Select investors Vertical

    1 SpaceXHawthorne, CA

    $536M N/A N/A Industrial

    2 Virgin Hyperloop OneLos Angeles, CA

    $172M Series C DP World Automotive & Transportation

    3 Restaurant365Irvine, CA

    $88M Series C Bessemer VenturePartners, Tiger Global Management

    Internet

    4 VideoAmpLos Angeles, CA

    $70M Series C Ankona Capital, The Raine Group Internet

    5 Criteria CorpWest Hollywood, CA

    $56M Private Equity Sumeru Equity Partners Internet

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 28

    483449

    528 514

    441419

    374

    438

    $6.6 $8.8 $10.9 $10.2

    $14.0

    $25.3

    $12.2 $13.7

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Deals rebound after three consecutive quarters of declineSan Francisco Bay Area deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 29

    Rounds over $500M dominate top dealsTop 5 San Francisco Bay Area dealsCompany Investment Round Select investors Vertical

    1 Cruise AutomationSan Francisco, CA

    $1.2B Corporate Minority

    General Motors, SoftBank Group, T.Rowe Price

    Automotive & Transportation

    2 DoorDashSan Francisco, CA

    $600M Series G SoftBank Group, Sequoia Capital, Temasek Holdings

    Internet

    3 SoFiSan Francisco, CA

    $500M Series G Third Point Ventures, Qatar Investment Authority

    Internet

    4 UberSan Francisco, CA

    $500M Corporate Minority

    PayPal Mobile & Telecommunications

    5 PAXSan Francisco, CA

    $420M Series E Tiger Global Management, Tao Capital Partners, Redmile Group

    Consumer Products & Services

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 30

    239 233 229241

    203

    178

    230212

    $4.7

    $3.1 $2.7 $3.0

    $5.9

    $2.2

    $4.5 $4.1

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Q2’19 deals and dollars decline slightly compared to Q1New York Metro deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 31

    Internet, software, and mobile continue to outpace other sectorsTop New York Metro dealsCompany Investment Round Select investors Vertical

    1 UiPathNew York, NY

    $568M Series D Accel, capitalG, Sequoia Capital

    Software (non-internet / mobile)

    2 GympassNew York, NY

    $300M Series D Atomico, General Atlantic, SoftBank Group

    Internet

    3 LemonadeNew York, NY

    $300M Series D Allianz X, General Catalyst, Google Ventures

    Internet

    4 FoursquareNew York, NY

    $150M Series G The Raine Group Mobile & Telecommunications

    5 SpringWorks TherapeuticsStamford, CT

    $125M Series B Bain Capital, GlaxoSmithKline, OrbiMed Advisors

    Healthcare

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 32

    3538

    27

    40

    27

    34

    23

    39

    $574.6

    $296.5 $392.5

    $589.6

    $924.8

    $741.6

    $296.3

    $805.8

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    San Diego metro deals and dollars jump in Q2’19San Diego Metro deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 33

    Healthcare startups dominate San Diego top dealsTop San Diego Metro dealsCompany Investment Round Select investors Vertical

    1 Poseida TherapeuticsSan Diego, CA

    $142M Series C Novartis, Aisling Capital, Vivo Capital

    Healthcare

    2 TuSimpleSan Diego, CA

    $105M Series D CDH Investments, Sina Weibo Fund

    Software

    3 Acutus MedicalCarlsbad, CA

    $100M Series D 8VC, Advent Venture Partners, GE Ventures

    Healthcare

    4 Vividion TherapeuticsSan Diego, CA

    $82M Series B ARCH Venture Partners, Versant Ventures, BVF Partners

    Healthcare

    5 LocanaSan Diego, CA

    $55M Series A ARCH Venture Partners, Google Ventures, Temasek Holdings

    Healthcare

    5 TealiumSan Diego, CA

    $55M Series F Presidio Ventures, Bain Capital Ventures, Silver Lake Partners

    Internet

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 34

    53

    40 39

    61

    45

    37

    46 45

    $691.0

    $326.5 $351.0

    $811.7 $656.6

    $227.1

    $473.7

    $668.1

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    Seattle funding jumps, deals down slightly in Q2’19Seattle Metro deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 35

    Seattle-based startups raise two $100M+ deals in Q2’19Top Seattle Metro dealsCompany Investment Round Select investors Vertical

    1 OutreachSeattle, WA

    $114M Series E DFJ Growth Fund, Sapphire Ventures, Spark Capital

    Internet

    2 Auth0Bellevue, WA

    $103M Series E Bessemer Venture Partners, K9 Ventures, Trinity Ventures

    Internet

    3 HighspotSeattle, WA

    $60M Series D ICONIQ Capital, Sapphire Ventures, Shasta Ventures

    Internet

    4 ZenotiBellevue, WA

    $50M Series C Accel, Norwest Venture Partners, Tiger Global Management

    Internet

    5 FlexeSeattle, WA

    $43M Series B Madrona Venture Group, Redpoint Ventures, Tiger Global Management

    Internet

  • 36Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    California and Washington materially increased deals in Q2’19Top 10 States by deal activity

    #1 California

    #5 Washington

  • 37Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Seven top states raise more capital in Q2’19Top 10 States by investments

    #1 California

    #5 Washington#4 Florida

    #7 Illinois#8 Colorado#9 Utah#10 North Carolina

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 38

    650595

    681 688

    583 565

    485

    576

    $8.5 $10.1 $13.1 $12.8

    $15.8

    $28.1

    $14.3 $16.2

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    California deal activity and funding jump in Q2’19California deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 39

    15

    29

    21

    24

    28

    24

    2122

    $1,054.0

    $601.4 $510.3

    $119.0 $230.5 $214.0 $161.1

    $742.6

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    Florida funding rises sharply in Q2’19Florida deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 40

    53

    40 39

    62

    45

    40

    47

    52

    $691.0

    $326.5 $351.0

    $823.7

    $656.6

    $280.4

    $473.7

    $733.1

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    WA deal activity and funding rise for the second-straight quarterWashington deals and dollars – Quarterly

  • 41Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Startups selling Internet SaaS solutions dominate deal activityTop 10 Verticals by deal activity

    #1 Healthcare > Biotechnology#2 Internet > SaaS > Monitoring & Security#3 Internet > SaaS > BI, Analytics & Performance Mgmt#3 Internet > eCommerce > Marketplace#5 Internet > SaaS > Advertising, Sales & Marketing#5 Internet > SaaS > Customer Relationship#7 Internet > SaaS > HR & Workforce Management#8 Internet > SaaS > Accounting & Finance#9 Internet > SaaS > Healthcare#10 Healthcare > Drug Development

  • 42Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Biotechnology, Drug Development and BI persist as top verticalsTop 10 Verticals by investments

    #1 Healthcare > Biotechnology#2 On Premise Software > Scientific, Engineering Software#3 Automotive & Transportation > Automobile Parts#4 Internet > SaaS > Monitoring & Security#5 Internet > SaaS > Accounting & Finance#6 Internet > eCommerce > Marketplace#7 Healthcare > Drug Development#8 Internet > eCommerce > Food & Grocery#9 Internet > SaaS > BI, Analytics & Performance Mgmt#10 Industrial > Aerospace & Defense

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 43

    72

    55

    68

    7771

    5451

    70

    $1.2 $1.6

    $2.1 $2.1 $2.2

    $1.1 $1.3

    $1.9

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Biotech deal activity rises sharply in Q2’19Healthcare Biotechnology deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 44

    23

    35

    23

    39

    32

    27

    31 30

    $629

    $1,412

    $1,098 $1,312

    $903 $1,056 $953 $948

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    Drug Development financing declines slightly in Q2’19Healthcare Drug Development deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 45

    53 5257 57

    66

    54

    41 40

    $563 $517 $516

    $1,461

    $857 $875

    $444 $665

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($M) # of Deals

    Cloud BI funding rebounds after declining three straight quarters Internet Business Intelligence Software deals and dollars – Quarterly

  • 46Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Fin Tech and AI tie for the most deals this quarterTop 10 Emerging Areas by deal activity

    #1 Fin Tech#1 AI

  • 47Source: PwC / CB Insights MoneyTree™ Report Q2 2019

    Fin Tech continues to raise the most money with AI close behindTop 10 Emerging Areas by investments

    #1 Fin Tech#2 AI

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 48

    158

    131

    156 153

    119111

    128139

    $1.5 $1.8 $2.1 $2.6

    $2.8 $2.6 $2.7

    $4.9

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    AI-related financing increases for the second-straight quarterArtificial Intelligence deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 49

    The AI sector saw one $1B+ deal in Q2’19Top Artificial Intelligence dealsCompany Investment Round Select investors Vertical

    1 Cruise AutomationSan Francisco, CA

    $1.15B Corporate Minority

    General Motors, Honda, SoftBank Group

    Automotive & Transportation

    2 UiPathNew York, NY

    $568M Series D Accel, capital, CoatueManagement, DragoneerInvestment Group

    Software

    3 LemonadeNew York, NY

    $300M Series D Allianz X, General Catalyst, Google Ventures

    Internet

    4 AfirmSan Francisco, CA

    $300M Series E+ Baillie Gifford & Co. Fidelity Investments, Founders Fund

    Mobile & Telecommunications

    5 TempusChicago, IL

    $200M Series E+ Baillie Gifford & Co., Franklin Templeton Investments, New Enterprise Associates

    Healthcare

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 50

    164 161

    217

    180 174158

    177

    139

    $2.3 $2.5 $2.5 $3.4 $3.0

    $3.5 $3.6

    $5.1

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Fin Tech-related deals fall amid rise in fundingFin Tech deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 51

    Top 5 Fin Tech deals all $300M and higherTop Fin Tech dealsCompany Investment Round Select investors Vertical

    1 UiPathNew York, NY

    $568M Series D Accel, capital, CoatueManagement, DragoneerInvestment Group

    Software

    2 SoFiSan Francisco, CA

    $500M Series E+ Marketplace Funds, Qatar Investment Authority, Third Point Ventures

    Internet

    3 CartaPalo Alto, CA

    $300M Series E+ Andreessen Horowitz, Goldman Sachs, Principal Strategic Investments

    Internet

    4 LemonadeNew York, NY

    $300M Series D Allianz X, General Catalyst, Google Ventures

    Internet

    5 AffirmSan Francisco, CA

    $300M Series E+ Baillie Gifford & Co. Fidelity Investments, Founders Fund

    Mobile & Telecommunications

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 52

    71

    60

    71 73

    5652

    68

    56

    $1.1 $0.8

    $0.6

    $1.7

    $1.1 $1.1

    $1.8 $2.1

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Cybersecurity deals fall amid slight rise in funding in Q2’19Cybersecurity deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 53

    Cybersecurity companies saw multiple $100M+ deals in Q2’19Top Cybersecurity dealsCompany Investment Round Select investors Vertical

    1 KnowBe4Clearwater, FL

    $300M Series D Elephant Venture Capital, KKR, Ten Eleven Ventures

    Internet

    2 Digital GuardianWaltham, MA

    $154M Series E+ Fairhaven Capital, LLR Partners, Neocarta Ventures

    Software (non-internet/mobile)

    3 DruvaSunnyvale, CA

    $130M Series E+ Atreides Management, Neuberger Berman, Nexus Venture Partners

    Internet

    4 SentinelOneMountain View, CA

    $120M Series D Data Collective, Granite Hill Capital Partners, Insight Partners

    Computer Hardware & Services

    5 DashlaneNew York, NY

    $110M Series D Balderton Capital, Bessemer Venture Partners, FirstMarkCapital

    Internet

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 54

    129

    99

    117

    164

    127

    93105

    130

    $1.2 $1.3

    $1.9 $1.9

    $2.7

    $1.9 $1.4

    $2.3

    Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

    Investments ($B) # of Deals

    Digital Health sector deals and dollars jumped in Q2’19Digital Health deals and dollars – Quarterly

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 55

    Digital health startups raised multiple $100M+ rounds in Q2Top Digital Health dealsCompany Investment Round Select investors Vertical

    1 Collective HealthSan Francisco, CA

    $205M Series E+ DFJ Growth Fund, Founders Fund, Google Ventures

    Financial

    2 TempusChicago, IL

    $200M Series E+ Baillie Gifford & Co., Franklin Templeton Investments, New Enterprise Associates

    Healthcare

    3 Encoded TherapeuticsSan Francisco, CA

    $104M Series C Alexandria Venture Investments, Altitude Life Science Ventures, ARCH Venture Partners

    Healthcare

    4 BHEBoston, MA

    $78M Growth Equity

    Leerink Transformation Partners, Silversmith Capital Partners

    Software (non-internet/mobile)

    5 Omada HealthSan Francisco, CA

    $73M Series E+ Andreessen Horowitz, Cigna Ventures, Civilization Ventures

    Internet

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 56

    Investor Funds raised (2015–Q2’19)

    Year founded

    Select investments Location

    1 Sequoia Capital* $17.5B 1972 DoorDash, Noom, Klarna Menlo Park, CA

    2 Insight Partners $12.5B 1995 SalesLoft, ezCater, Checkout.com New York, NY

    3 Andreessen Horowitz $9.7B 2009 TripActions, ADDI, People.ai Menlo Park, CA

    4 Summit Partners $9.1B 1984 Red Canary, Klaviyo Boston, MA

    5 New Enterprise Associates $6.5B 1977 Collective Health, Tempus Menlo Park, CA

    The top 5 VCs have raised over $55B since 2015 Top VCs by amount raised

    Note: includes all funds under the Sequoia Capital umbrella

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 57

    Only one top 5 VC is focused on seed-stage dealsMost active VCs in Q2 2019

    Investor Deals Select investments Location

    1 New Enterprise Associates 28 Coursera, Collective Health, Expel Menlo Park, CA

    2 Plug and Play Ventures 24 Zippia, Datch, Back Office Sunnyvale, CA

    3 Lightspeed Venture Partners 19 People.ai, BetterUp, Affirm Menlo Park, CA

    4 Google Ventures 19 Harness, Lemonade, Hover Mountain View, CA

    5 Kleiner Perkins 17 Nextdoor, Feather, Labelbox Menlo Park, CA

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 58

    1,6911,552

    1,698 1,810 1,5961,475 1,468 1,519

    1,032 1,139 1,1661,540 1,537

    1,259 1,181 1,169

    750 747 758 784 718 779 759 786

    Q3‘17 Q4‘17 Q1‘18 Q2‘18 Q3‘18 Q4‘18 Q1‘19 Q2‘19

    North American deal activity pulls firmly ahead of AsiaGlobal deal activity: North America, Asia, and Europe

    # of deals: North America Asia Europe

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 59

    $22 $21 $24 $26

    $30

    $40

    $27 $30

    $20 $23

    $20 $22 $20 $22 $19 $15

    $6 $5 $5 $6 $5 $5 $8 $8

    Q3‘17 Q4‘17 Q1‘18 Q2‘18 Q3‘18 Q4‘18 Q1'19 Q2'19

    North America maintains dollar funding lead over AsiaGlobal dollar funding: North America, Asia, and Europe

    Investments ($B): EuropeAsiaNorth America

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 60

    SoftBank Group leads the world’s largest deals Largest global deals of Q2 2019Company Investment Round Select investors Vertical

    1 Cruise AutomationSan Francisco, USA

    $1.15B Corporate Minority

    General Motors, Honda, SoftBank Group

    Automotive & Transportation

    2 RappiBogota, Colombia

    $1.00B Corporate Minority

    SoftBank Group Mobile & Telecommunications

    3 GreensillLondon, UK

    $800M Corporate Minority

    SoftBank Group Financial

    4 Face++Beijing, China

    $750M Series D Alibaba Group, Macquarie Group Software (non-internet/mobile)

    5 DoorDashSan Francisco, USA

    $600M Series G Coatue Management, SoftBankGroup, DST Global

    Internet

  • AppendixPwC / CB InsightsMoneyTree™ ReportQ2 2019

  • Source: PwC / CB Insights MoneyTree™ Report Q2 2019 62

    US States: Full listing of Q2 2019 deals and investments

    State $M Deals State $M Deals State $M Deals State $M Deals

    Alabama 8 2 Illinois 490 36 Missouri 42 11 Pennsylvania 204 25

    Arizona 177 15 Indiana 37 13 Nebraska 2 1 South Carolina 24 5

    California 16,227 576 Kansas 25 1 Nevada 4 2 Tennessee 86 10

    Colorado 402 45 Kentucky 107 5 New Jersey 86 11 Texas 687 72

    Connecticut 154 10 Louisiana 8 1 New Mexico 185 6 Utah 402 20

    DC 57 6 Maine 102 2 New York 3,883 203 Virginia 131 23

    Delaware 93 3 Maryland 224 21 North Carolina 381 19 Washington 733 52

    Florida 743 22 Massachusetts 2,207 112 Ohio 131 11 Wisconsin 69 12

    Georgia 208 20 Michigan 268 9 Oklahoma 4 1

    Hawaii NA 1 Minnesota 47 12 Oregon 50 7

  • 63

    What is included:• Equity financings into emerging companies. Fundings must be to VC-backed

    companies, which are defined as companies that have received funding atany point from either: venture capital firms, corporate venture arms, or superangel investors.

    • Fundings of private companies only. Funding rounds raised by public companies ofany kind on any exchange (including Pink Sheets) are excluded from our numbers,even if they received investment by a venture firm(s).

    • Only includes the investment made in the quarter for tranched investments. If acompany does a second closing of its Series B round for $5M and previously hadclosed $2M in a prior quarter, only the $5M is reflected in our results.

    • Round numbers reflect what has closed, not what is intended. If a companyindicates the closing of $5M out of a desired raise of $15M, our numbers reflectonly the amount which has closed.

    • Only verifiable fundings are included. Fundings are verified via (1) various federaland state regulatory filings; (2) direct confirmation with firm or investor; (3) pressrelease; or (4) credible media sources.

    • Equity fundings to joint ventures and spinoffs/spinouts are included, given that theymeet the VC-backed criteria.

    • Geography note: Israel funding figures are classified inAsia.

    What is excluded:• No contingent funding. If a company receives a commitment for $20M subject to

    hitting certain milestones but first gets $8M, only the $8M is included in our data.• No business development/R&D arrangements, whether transferable into equity

    now, later or never. If a company signs a $300M R&D partnership with a largercorporation, this is not equity financing nor is it from venture capital firms. As aresult, it is not included.

    • No buyouts, consolidations or recapitalizations. All three of these transaction typesare commonly employed by private equity firms and are tracked by CB Insights.However, they are excluded for the purposes of this report.

    • No private placements. These investments, also known as PIPEs (PrivateInvestment in Public Equities), are not included even if made by a venturecapital firm(s).

    • No debt/loans of any kind (except convertible notes). Venture debt or any kind ofdebt/loan issued to emerging, startup companies, even if included as an additionalpart of an equity financing, is not included. If a company receives $3M with $2Mfrom venture investors and $1M in debt, only the $2M is included in these statistics.

    • No non-equity government funding. Grants or loans by the federal government,state agencies, or public-private partnerships to emerging, startup companiesare not included.

    • No fundings to subsidiaries of a larger parent corporation.

    PwC (pwc.com/moneytree) and CB Insights (cbinsights.com) encourage you to review the methodology and definitions employed to better understandthe numbers presented in this report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if you feel your firm has been underrepresented, please send an email to [email protected] and we can work together toensure your firm’s investment data is up-to-date.

    Rankings, e.g., top states and top sectors, are done by quarterly deal activity (that is, deal count for the given quarter).

    Methodology MoneyTree definitions

    mailto:[email protected]://www.pwc.com/us/en/industries/technology/moneytree/moneytree-definitions.html

  • 64

    Disclaimer

    This content is for general information purposes only, and should not be used as a substitute for consultation withprofessional advisors. Data is current as of July 11, 2019. PricewaterhouseCoopers and CB Insights have takenresponsible steps to ensure that the information contained in the MoneyTree™ Report has been obtained from reliablesources. However, neither PwC nor CB Insights can warrant the ultimate validity of the data obtained in this manner.Results are updated periodically. Therefore, all data is subject to change at any time.© 2019 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and maysometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structurefor further details.

    Slide Number 1Executive summaryQ2 investments rise after fall from funding record set in Q4’18�US deals and dollars – Quarterly2019 YTD US funding is strong�US deals and dollars – Annual2019 records the largest first half this century�US funding – Quarterly seasonalitySeed deal activity fluctuated down to its lowest level in six years�Deal activity by roundOverall median deal size jumped 26% to $7.6M from Q1’19�Median deal size by roundQ2’19 saw a record number of $100M+ funding rounds�Mega-rounds – Investments and deal countsMega-rounds maintain a high percentage of all deals�Mega-rounds – Funding and share of dealsUS $100M+ rounds are on track to set records again�Mega-rounds – Quarterly seasonalityInternet companies raised the most funding rounds of any sectorDeals and dollars – US sectorsQ2 2019 saw one $1B+ funding round (13th largest of all time)�Largest US deals of Q2 2019Juul moves into the #1 spot following Uber’s IPOTop 5 funded US companies – Q2 2019Q2’19 saw new US unicorns at near-record levels�Unicorns – New US VC-backed unicorns by quarterUnicorn population remains at record level, despite recent exits�US unicorn populationSlide Number 16Slide Number 17Time-to-liquidation reaches highest level since Q3 2017 US M&A exits — QuarterlyUS IPO exits reach 8-quarter record in Q2’19 US IPOs — Quarterly Time-to-liquidation converges for M&A and IPO exits�M&A exits and IPOs combined — Time-to-liquidationQ2’19 M&A exits nearly flat, but IPOs more than double from Q1�M&A exits and IPOs combined — Number of exitsInternet and Healthcare sectors dominate the top deals�Top 5 M&A exits of Q2 2019San Francisco Bay Area sees continued surge of top IPOs�Top 5 IPOs of Q2 2019Three top metros raise notably more rounds in Q2’19�Top 10 Metros by deal activityEight top metros raise more capital in Q2’19�Top 10 Metros by investmentsQuarterly deals rebound after sharp decline�LA Metro deals and dollars – QuarterlyOne mega-round eclipses other top LA deals�Top 5 LA Metro dealsDeals rebound after three consecutive quarters of decline�San Francisco Bay Area deals and dollars – Quarterly Rounds over $500M dominate top deals�Top 5 San Francisco Bay Area dealsQ2’19 deals and dollars decline slightly compared to Q1�New York Metro deals and dollars – Quarterly Internet, software, and mobile continue to outpace other sectors�Top New York Metro dealsSan Diego metro deals and dollars jump in Q2’19�San Diego Metro deals and dollars – Quarterly Healthcare startups dominate San Diego top deals �Top San Diego Metro dealsSeattle funding jumps, deals down slightly in Q2’19�Seattle Metro deals and dollars – Quarterly Seattle-based startups raise two $100M+ deals in Q2’19�Top Seattle Metro dealsCalifornia and Washington materially increased deals in Q2’19�Top 10 States by deal activitySeven top states raise more capital in Q2’19�Top 10 States by investmentsCalifornia deal activity and funding jump in Q2’19�California deals and dollars – Quarterly Florida funding rises sharply in Q2’19�Florida deals and dollars – Quarterly WA deal activity and funding rise for the second-straight quarter�Washington deals and dollars – Quarterly Startups selling Internet SaaS solutions dominate deal activity�Top 10 Verticals by deal activityBiotechnology, Drug Development and BI persist as top verticals�Top 10 Verticals by investmentsBiotech deal activity rises sharply in Q2’19�Healthcare Biotechnology deals and dollars – Quarterly Drug Development financing declines slightly in Q2’19�Healthcare Drug Development deals and dollars – Quarterly Cloud BI funding rebounds after declining three straight quarters �Internet Business Intelligence Software deals and dollars – Quarterly Fin Tech and AI tie for the most deals this quarter�Top 10 Emerging Areas by deal activityFin Tech continues to raise the most money with AI close behind�Top 10 Emerging Areas by investmentsAI-related financing increases for the second-straight quarter�Artificial Intelligence deals and dollars – Quarterly The AI sector saw one $1B+ deal in Q2’19�Top Artificial Intelligence dealsFin Tech-related deals fall amid rise in funding�Fin Tech deals and dollars – Quarterly Top 5 Fin Tech deals all $300M and higher�Top Fin Tech dealsCybersecurity deals fall amid slight rise in funding in Q2’19�Cybersecurity deals and dollars – Quarterly Cybersecurity companies saw multiple $100M+ deals in Q2’19 �Top Cybersecurity dealsDigital Health sector deals and dollars jumped in Q2’19 �Digital Health deals and dollars – Quarterly Digital health startups raised multiple $100M+ rounds in Q2�Top Digital Health dealsThe top 5 VCs have raised over $55B since 2015 Top VCs by amount raisedOnly one top 5 VC is focused on seed-stage deals�Most active VCs in Q2 2019North American deal activity pulls firmly ahead of AsiaGlobal deal activity: North America, Asia, and EuropeNorth America maintains dollar funding lead over AsiaGlobal dollar funding: North America, Asia, and EuropeSoftBank Group leads the world’s largest deals �Largest global deals of Q2 2019Slide Number 61US States: Full listing of Q2 2019 deals and investmentsMethodologyDisclaimer