Venture Capital Report - Dow Jones &...
21
VENTURE CAPITAL REPORT Venture Capital Report U.S. | 3Q | 2015
Transcript of Venture Capital Report - Dow Jones &...
V E N T U R E C A P I T A L R E P O R T
Venture Capital Report U.S. | 3Q | 2015
V E N T U R E C A P I T A L R E P O R T
VENTURE CAPITAL REPORT
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 3Q 2015 include:
• U.S. venture capital fundraising increased both in number of funds and amount invested;
• Venture capital investment into U.S. companies on the rise quarter-over-quarter ;
• Median pre-money valuation decreased 3% from 1Q 2015;
• Amounts raised through Initial public offerings (IPOs) went up, while mergers and acquisitions (M&As) experienced a decrease from the previous quarter.
2
V E N T U R E C A P I T A L R E P O R T
VENTURE FUNDRAISING INCREASES IN U.S. DURING 3Q 2015
3
FUNDRAISING
U.S. VC Fundraising (2012 – 2015) Based on multiple closings
86 funds garnered $12.9 billion in 2Q 2015, both an increase in the amount raised (51%) and increase in number of funds (23%) from the prior quarter.
• New Enterprise Associates 15 LP was the largest U.S. venture capital fund of 2Q 2015 raising almost $3.2 billion and accounting for 24% of the total amount
raised during the quarter.
• Median U.S. fund size was $125 million in the first half of 2015.
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Amount Raised ($B) $5.04 $3.65 $4.60 $6.80 $4.11 $5.03 $10.5 $8.33 $6.67 $8.63 $8.59 $12.9
Number of Funds 54 59 60 58 66 82 82 87 86 99 70 86
0
20
40
60
80
100
120
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
V E N T U R E C A P I T A L R E P O R T
LARGEST VC FUNDS RAISED IN 3Q 2015
4
FUNDRAISING
Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type
New Enterprise Associates Inc. New Enterprise
Associates 15 LP
$3,150.00 Timonium MD Closed Multi-stage venture
capital
Venture Capital Final
Institutional Venture Partners Institutional Venture
Partners XV LP $1,400.00 Menlo Park CA Closed Late-stage venture
capital
Venture Capital Final
Insight Venture Partners Insight Venture Partners IX LP $1,387.96 New York NY Open
Late-stage venture capital
Venture Capital First
The Social+Capital Partnership
Social Capital Partnership III LP $600.00 Palo Alto CA Closed Early-stage venture
capital
Venture Capital Final
GGV Capital GGV Capital Select LP $457.00 Menlo Park CA Closed Early-stage venture capital
Venture Capital Final
V E N T U R E C A P I T A L R E P O R T
U.S. VENTURE INVESTMENT IN 3Q 2015 ON THE RISE
U.S.-based companies raised $19 billion in 1034 venture capital deals in 2Q 2015, a 15% rise in capital raised, with number of deals also experiencing an increase of 12% from the previous quarter.
• Compared to the same period in 2014, amount invested went up 24%, while number of deals experienced a minimal decrease.
• Business and Financial Services is the strongest sector with 30% share of total amount invested.
5
FINANCING
Equity Financings into U.S. — Based, VC-backed Companies (2012–2015)
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Amount Raised ($B) $8.23 $9.14 $7.66 $8.87 $9.43 $9.75 $12.48 $15.44 $11.38 $17.73 $16.73 $19.19
Number of Deals 947 940 926 958 969 1030 975 1038 961 932 926 1034
800
1000
1200
$0.00
$5.00
$10.00
$15.00
$20.00
V E N T U R E C A P I T A L R E P O R T
Number of Deals
EQUITY FINANCINGS INTO U.S.–BASED, VC–BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2012–2015)
6
FINANCING
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Restart 11 18 7 7 8 11 8 8 9 7 6 5
Later 287 280 262 285 273 278 294 357 286 312 313 358
Second 147 161 147 202 204 212 191 224 198 188 229 234
First 330 319 348 310 334 381 328 348 344 337 299 358
Seed 123 111 125 122 110 95 107 60 84 51 50 49
0
100
200
300
400
500
V E N T U R E C A P I T A L R E P O R T
Amount Raised ($B)
EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2012–2015)
7
FINANCING
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Restart $0.24 $0.69 $0.08 $0.18 $0.08 $0.11 $0.29 $0.17 $0.12 $0.13 $0.04 $0.11
Later $4.84 $4.33 $4.39 $5.00 $5.15 $5.26 $6.98 $10.13 $5.99 $11.77 $10.48 $11.62
Second $1.33 $1.40 $1.34 $1.81 $1.72 $1.93 $2.02 $2.67 $1.94 $2.79 $3.08 $3.29
First $1.46 $1.77 $1.53 $1.37 $1.62 $2.04 $1.72 $2.16 $2.04 $2.44 $2.07 $2.15
Seed $0.11 $0.09 $0.09 $0.10 $0.10 $0.09 $0.08 $0.07 $0.11 $0.06 $0.05 $0.05
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
V E N T U R E C A P I T A L R E P O R T
EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE ($M) (2012–2015)
8
FINANCING Median Equity Deal Size ($M)
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Median Equity Deal Size ($M) $3.76 $4.10 $4.00 $4.43 $3.60 $4.26 $4.10 $6.00 $5.00 $6.55 $6.35 $5.73
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
V E N T U R E C A P I T A L R E P O R T
EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2015)
Business and Financial Services received the largest investment allocation during 2Q’15 (30%), accumulating almost $5.8 billion through 286 deals. The figures represent a respective increase of 48% and 20% from 1Q’15.
• The Consumer Services placed second in terms of equity financing, taking a 24% share of all 2Q’15 investment. 197 deals drew $4.7 billion, up 8% in capital raised.
• Healthcare ranked third with almost $3.9 billion in 195 deals, 1% lower from the previous quarter. The sector’s investment figure represents a 20% share of total equity investment into U.S. VC-backed companies for the quarter.
• $3.5 billion were raised by Information Technology (IT) in 273 deals, an increase of 16% in capital invested and 5% in deal flow.
9
FINANCING 3Q'15 Industry Breakdown By Number of Deals
3Q’15 Industry Breakdown By Amount Raised ($B)
286
39
197 14
195
22
273
Business and Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
30%
2%
24% 4%
20%
2%
18%
Business and Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
273
18%
39
2%
V E N T U R E C A P I T A L R E P O R T
TOP 5 DEALS INTO VC-BACKED COMPANIES (3Q 2015)
1 0
FINANCING
Co. Name Location Industry Group Industry Segment Industry Code Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)
Airbnb Inc. San Francisco,
CA Consumer Services
Travel and Leisure
Travel Arrangement/
Tourism
Provider of an online marketplace for rental
and short-term stay accommodations.
6/26/2015 5th $1,500.00
Baillie Gifford & Co. Ltd., China Broadband Capital Partners LP, Fidelity Investments, General Atlantic LLC*, GGV Capital,
Hillhouse Capital Management Ltd.*, Horizon Ventures, Kleiner Perkins Caufield & Byers, T. Rowe Price Group Inc., Temasek
Holdings Pvt. Ltd., Tiger Global Management LLC*, Wellington Management Co. LLP
FourPoint Energy LLC
Greenwood Village, CO
Energy and Utilities
Non-Renewable Energy
Oil/Gas Exploration and
Production
Provider of energy exploration services
and products. 6/30/2015 ACQ
Financing $619.00 GSO Capital Partners LP*
YourPeople Inc. San Francisco,
CA
Business and Financial Services
Business Support Services
Human Resources/Recruitment
Provider of a human resources (HR)
software solution. 5/1/2015 4th $512.59
Andreessen Horowitz, Comcast Ventures, Fidelity Management & Research Co.*, Founders Fund LLC, Individual Investors,
Insight Venture Partners, Institutional Venture Partners, Khosla Ventures, Sound Ventures, TPG Growth LLC*
WeWork Companies Inc.
New York, NY
Business and Financial Services
Financial Institutions and
Services Real Estate
Provider of shared office space.
6/24/2015 5th $433.90 Benchmark Capital, Fidelity Management & Research Co.*, Goldman Sachs Group Inc., JPMorgan Chase & Co., T. Rowe
Price Group Inc., Wellington Management Co. LLP
AliphCom Inc. San Francisco,
CA Information Technology
Electronics and Computer Hardware
Consumer Electronics
Provider of mobile lifestyle innovations.
4/15/2015 Later $300.00 BlackRock Private Equity Partners*
V E N T U R E C A P I T A L R E P O R T
MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (3Q 2015)
1 1
FINANCING
28
21
16 15
14
0
5
10
15
20
25
30
New Enterprise Associates Inc. Accel Partners Andreessen Horowitz Google Ventures Intel Capital
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (3Q 2015)
1 2
FINANCING Number of Deals in 3Q 2015 by Primary Region
Amount Raised ($B) in 3Q 2015 by Primary Region
Number of Deals by Primary Region 3Q 2015 0
210
17
49
45
110
347
45
34
64
105
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 3Q 2015 $0.00
$3.70
$0.19
$0.34
$1.13
$1.45
$9.30
$0.51
$0.31
$0.60
$1.65
Alaska/Islands Mid-Atlantic Midwest Central Midwest East Mountain New England Northern California Pacific Northwest South Central South East Southern California
Alaska/Islands
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY SUBREGION (3Q 2015)
1 3
FINANCING
Number of Deals by subregion 3Q 2015
Amount Raised ($B) by subregion 3Q 2015
San Francisco Bay Area 342 $9.29 Boston Metro 97 $1.35 New York Metro 141 $2.96 Potomac 28 $0.43 Los Angeles Metro 61 $1.10 San Diego Metro 22 $0.17 Orange County 15 $0.27 Seattle Metro 34 $0.45 Austin Metro 18 $0.10 Dallas-Fort Worth 6 $0.18 Chicago Metro 18 $0.11
Subregion Breakout Number of Deals
Subregion Breakout Amount Raised ($B)
34
342
22
28
15
141
61
6
18
97
18
Seattle Metro
San Francisco Bay Area
San Diego Metro
Potomac
Orange County
New York Metro
Los Angeles Metro
Dallas-Fort Worth
Chicago Metro
Boston Metro
Austin Metro Number of Deals by Subregion
$0.45 $9.29
$0.17 $0.43
$0.27 $2.96
$1.10 $0.18 $0.11
$1.35 $0.10
Seattle Metro San Francisco Bay Area
San Diego Metro Potomac
Orange County New York Metro
Los Angeles Metro Dallas-Fort Worth
Chicago Metro Boston Metro Austin Metro Amount Raised ($B) by
V E N T U R E C A P I T A L R E P O R T
EQUITY FINANCINGS INTO U.S.–BASED, VC-BACKED COMPANIES, MEDIAN PRE-MONEY VALUATION
1 4
Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M) (2012-2015)
VALUATIONS
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Median Pre-money Valuation ($M) $29.10 $39.51 $19.00 $26.34 $18.16 $22.50 $25.75 $50.25 $35.75 $57.75 $67.14 $65.00
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
V E N T U R E C A P I T A L R E P O R T
VENTURE M&A AND IPO MARKET ACTIVITY IN THE U.S. DURING 3Q 2015
Mergers and acquisitions (M&As) of venture-backed companies dropped 16% in value from 1Q 2015, with 86 deals garnering $9.5 billion.
• Initial public offering (IPO) activity increased in 2Q 2015 raising $2.5 billion, up 178% from the previous quarter.
1 5
LIQUIDITY
Exit Opportunities for U.S. VC–backed Companies (2012–2015)
0 20 40 60 80 100 120 140 160
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
2Q'15
3Q'15
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
IPOs 10 8 9 20 24 20 38 24 22 23 12 27
M&As 110 126 103 97 125 135 127 123 135 113 117 86
V E N T U R E C A P I T A L R E P O R T
U.S. VC-BACKED M&As (2012-2015)
86 M&As of venture-backed companies in the U.S. garnered almost $9.5 billion during 2Q 2015.
• In contrast with 1Q 2015, when a total of 117 transactions accumulated $11 billion, number of deals and amount raised decreased by 26% and 16% respectively.
• The largest M&A of the quarter was lynda.com Inc., which was acquired by LinkedIn Corp. (NYSE:LNKD) for $1.5 billion.
1 6
LIQUIDITY
U.S. VC-backed M&A Activity (2012 - 2015)
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Amount Paid ($B) $11.85 $8.95 $5.61 $9.32 $12.32 $14.15 $15.78 $11.14 $20.24 $34.15 $11.30 $9.48
Number of M&As 110 126 103 97 125 135 127 123 135 113 117 86
0
20
40
60
80
100
120
140
160
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
V E N T U R E C A P I T A L R E P O R T
TOP 3 U.S. M&Ms (3Q 2015)
1 7
LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M) Acquirer
lynda.com Inc. Carpinteria, CA Provider of
online learning solutions. Educational/Training Media and Services Media and Content
Consumer Services 5/30/2015 Acquisition $1,500.00 LinkedIn Corp.
Symphony Teleca Corp. Palo Alto, CA
Provider of technology-based
outsourcing services. IT Consulting
Business Support Services
Business and Financial Services 4/09/2015 Acquisition $780.00
Harman International
Industries Inc.
Applied Predictive Technologies Inc. Arlington, VA
Provider of cloud-based predictive
analytics software.
Business Applications Software Software
Information Technology 5/12/2015 Acquisition $600.00 MasterCard Inc.
V E N T U R E C A P I T A L R E P O R T
U.S. VC-BACKED IPOs (2012-2015)
27 venture-backed companies raised $2.5 billion through public offerings in 2Q 2015. Number of deals increased by 125% and capital raised more than tripled the amount from the previous quarter ($912 million).
• The largest IPO of the quarter was FitBit Inc. (NYSE: FIT), which completed a $732 million IPO.
1 8
LIQUIDITY
U.S. VC-backed IPO Activity (2012 - 2015)
3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15
Raised ($B) through IPO $0.81 $1.22 $0.64 $1.80 $2.13 $3.55 $2.94 $1.96 $1.30 $3.15 $0.91 $2.53
Number of IPOs 10 8 9 20 24 20 38 24 22 23 12 27
0
5
10
15
20
25
30
35
40
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
V E N T U R E C A P I T A L R E P O R T
TOP 3 U.S. IPOs (3Q 2015)
1 9
LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type
Raised through IPO ($M) Exchange
Fitbit Inc. San Francisco,
CA
Provider of wearable fitness devices and an online
health platform.
Consumer Electronics
Electronics and Computer Hardware
Information Technology 6/18/2015 IPO $731.50 NYSE: FIT
Etsy Inc. New York, NY Operator of an online
marketplace for buying and selling handmade goods.
Shopping Facilitators
Consumer Information Services
Consumer Services 4/16/2015 IPO $266.67 NASDAQ: ETSY
Evolent Health Inc. Arlington, VA
Provider of a software platform for healthcare providers to
manage a value-based care model.
Healthcare Administration
Software
Medical Software and Information Services Healthcare 6/5/2015 IPO $195.50 NYSE: EVH
V E N T U R E C A P I T A L R E P O R T
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.
2 0
V E N T U R E C A P I T A L R E P O R T
ABOUT DOW JONES
Dow Jones is a global provider of news and business information, delivering content to consumers and organizations around the world across multiple formats, including print, digital, mobile and live events. Dow Jones has produced unrivaled quality content for more than 125 years and today has one of the world’s largest newsgathering operations globally. It produces leading publications and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulation; Factiva, Barron’s, MarketWatch, Financial News, DJX, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones VentureSource.
MEDIA CONTACT:
Rachel Manfredo 212.416.3834
2 1
