VentureSource U.S. -- 2Q 2014

Transcription

1 U.S. -- 2Q 2014

2 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 2Q 2014 include: U.S. venture capital fundraising amount raised and number of funds on decline from 1Q 2014; Venture capital investment was at its highest since 1Q 2001; Median pre-money valuation totaled $58M, more than double the valuation figure for 1Q 2014; Amount raised and transactions on decline for both venture-backed mergers and acquisitions (M&As) and Initial public offerings (IPOs). 2

3 Venture Fundraising in U.S. on decline from 1Q 2014 FUNDRAISING 76 funds garnered $7.4 billion in 2Q 2014, down 28% from the amount raised in the previous quarter. Number of funds also experienced a 5% decrease. Tiger Global Private Investment Partners VIII LP was the largest U.S. venture capital fund of 2Q 2014 raising $1.5 billion and accounting for 20% of the total amount raised during the quarter. Median U.S. fund size was $172 million in the first half of U.S. VC Fundraising ( ) Based on multiple closings Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Raised ($B) $3.59 $2.92 $6.76 $7.45 $6.57 $5.11 $3.04 $4.58 $6.76 $4.11 $4.80 $10.3 $7.43 Number of Funds $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 3

4 Largest VC Funds Raised in 2Q 2014 FUNDRAISING Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type Tiger Global Management LLC Tiger Global Private Investment Partners VIII LP $1, New York NY Closed Multi-stage venture capital Venture Capital Final Bain Capital Ventures Bain Capital Venture Capital Fund 2014 LP $ Boston MA Closed Early-stage venture capital Venture Capital Final GGV Capital GGV Capital V LP $ Menlo Park CA Closed Early-stage venture capital Venture Capital Final Oak Investment Partners Oak HC/FT Partners LP $ Norwalk CT Open Multi-stage venture capital Venture Capital First Iconiq Strategic Partners ICONIQ Strategic Partners LP $ San Francisco CA Open Multi-stage venture capital Venture Capital First 4

5 FINANCING U.S. Venture Investment on the Rise in 2Q 2014 U.S.-based companies raised $13.8 billion from 917 venture capital deals during 2Q 2014, a 21% and 4% increase both in capital and deal count from the previous quarter. Compared to the same period in 2013, amount invested registered a 60% increase, while number of deals dipped 2%. Consumer Services and Business and Financial Services were the strongest sectors, respectively with 28% and 24% share of total amount invested. Equity Financings into U.S. based, VC-backed Companies ( ) $16.00 $ $12.00 $10.00 $ $6.00 $4.00 $2.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Raised ($B) $9.15 $10.77 $8.12 $7.60 $9.34 $7.78 $9.03 $7.60 $8.64 $9.36 $9.34 $11.41$13.84 Number of Deals

6 FINANCING Equity Financings into U.S. based, VC backed Companies, by Round Class ( ) Number of Deals Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Restart Later Second First Seed

7 FINANCING Equity Financings into U.S. based, VC backed Companies, by Round Class ( ) Amount Raised ($B) $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Restart $0.40 $0.23 $0.08 $0.09 $0.16 $0.24 $0.69 $0.08 $0.18 $0.08 $0.11 $0.29 $0.14 Later $4.58 $5.97 $4.69 $4.15 $5.11 $4.54 $4.43 $4.44 $4.84 $5.26 $5.10 $6.35 $9.24 Second $1.90 $1.96 $1.50 $1.01 $1.56 $1.27 $1.34 $1.30 $1.73 $1.55 $1.84 $1.81 $2.55 First $1.60 $2.11 $1.46 $1.47 $2.08 $1.38 $1.64 $1.52 $1.35 $1.63 $1.86 $1.42 $1.69 Seed $0.10 $0.13 $0.11 $0.10 $0.09 $0.10 $0.09 $0.07 $0.08 $0.09 $0.06 $0.06 $0.04 7

8 FINANCING Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M) ( ) Median Equity Deal Size ($M) $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Median Equity Deal Size ($M) $5.00 $5.28 $4.00 $3.96 $4.58 $3.71 $4.17 $4.00 $4.54 $4.00 $4.30 $4.50 $6.25 8

9 FINANCING Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (2Q 2014) Consumer Services saw the largest investment allocation, with 171 deals garnering almost $3.9 billion and accounting for 28% of total equity investment. The Business and Financial Services sector raised the second highest proportion of investment for 2Q 14 - $3.3 billion into 242 deals, up 4% and 9% in dollars and deals, respectively, from 1Q 14 figures. IT and Healthcare shared third position. IT decreased 13% quarter over quarter, with $3 billion invested in 236 deals, a 4% drop also for the number of deals. The sector s investment figure represents a 22% share of total equity investment into U.S. VC-backed companies for the quarter. Healthcare companies raised $3 billion across 201 deals, a 33% and 18% increase compared to the previous quarter. 2Q'14 Industry Breakdown By Number of Deals 2Q 14 Industry Breakdown By Amount Raised ($B) Business and Financial Services Consumer Goods Consumer Services 22% 24% Business and Financial Services Consumer Goods Energy & Utilities Healthcare 2% 1% Consumer Services Energy & Utilities Industrial Goods & Materials Information Technology 22% 1% 28% Healthcare Industrial Goods & Materials Information Technology 9

10 Top 5 Deals into VC-backed Companies (2Q 2014) FINANCING Co. Name Location Industry Group Industry Segment Industry Code Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead) Uber Technologies Inc. San Francisco, CA Consumer Services Travel and Leisure Transportation Services Provider of an on-demand transportation service platform. 06/06/2014 5th $1, BlackRock Private Equity Partners*, Fidelity Investments*, Google Ventures, Kleiner Perkins Caufield & Byers, Menlo Ventures, Summit Partners, Wellington Management Co. LLP* 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. 4/18/2014 4th $ Dragoneer Investment Group*, Sequoia Capital, T. Rowe Price Group Inc., TPG Growth LLC* PURE Storage Inc. Mountain View, CA Information Technology Electronics and Computer Hardware Data Storage Manufacturer of flashstorage boxes for data centers. 4/17/2014 5th $ Fidelity Investments, Greylock Partners, Index Ventures, Redpoint Ventures, Sutter Hill Ventures, T. Rowe Price Group Inc., Tiger Global Management LLC, Wellington Management Co. LLP Pinterest Inc. San Francisco, CA Consumer Services Consumer Information Services Online Communities Provider of a visual discovery tool to find ideas for projects and interests. 5/15/2014 6th $ Andreessen Horowitz, Bessemer Venture Partners, Fidelity Growth Partners Europe, FirstMark Capital LLC, SV Angel, Valiant Capital Management LP Automattic Inc. San Francisco, CA Consumer Services Consumer Information Services Online Communities Provider of open source blogging solutions. 5/2/2014 3rd $ Endurance Ventures, Iconiq Strategic Partners, Insight Venture Partners, Tiger Global Management LLC, True Ventures, Individual Investors 10

11 FINANCING Most Active Investors for U.S.-based, VC-backed Companies (2Q 2014) Andreessen Horowitz New Enterprise Associates SV Angel First Round Capital Sequoia Capital 11

12 FINANCING Number of Deals by Primary Region 2Q 2014 Amount Raised ($B) by Primary Region 2Q 2014 Alaska/ Islands Mid-Atlantic Midwest Central Midwest East Mountain New England Northern California Pacific Northwest South Central South East Southern California $ $1.95 $0.18 $0.35 $0.39 $1.19 $7.45 $0.39 $0.30 $0.36 $0.86 Number of Deals in 2Q 2014 by Primary Region Amount Raised ($B) in 2Q 2014 by Primary Region 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 12

13 FINANCING Number of Deals by subregion 2Q 2014 Amount Raised ($B) by subregion 2Q 2014 San Francisco Bay Area 323 $7.40 Boston Metro 78 $0.79 New York Metro 122 $1.57 Potomac 33 $0.18 Los Angeles Metro 37 $0.37 San Diego Metro 17 $0.29 Orange County 16 $0.18 Seattle Metro 26 $0.35 Austin Metro 26 $0.18 Dallas-Fort Worth 8 $0.07 Chicago Metro 21 $0.13 Subregion Breakout Number of Deals Subregion Breakout Amount Raised ($B) Number of Deals by Subregion Amount Raised ($B) by Subregion 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 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 $0.79 $1.57 $0.18 $0.37 $0.29 $0.18 $0.35 $0.18 $0.07 $0.13 $

14 VALUATIONS Equity Financings into U.S. based, VC-backed Companies, Median Pre-money Valuation ($M) ( ) $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Median Pre-money Valuation ($M) $21.80 $28.50 $19.76 $16.00 $17.50 $29.88 $39.01 $13.60 $24.15 $15.80 $20.00 $28.35 $

15 LIQUIDITY Venture M&A and IPO Market Activity in the U.S. during 2Q 2014 Mergers and acquisitions (M&As) of venture-backed companies in 2Q 2014 decreased by 26% in value from those completed in 1Q 2014, with 108 deals garnering $12.6 billion. 25 venture-backed IPOs took place during 2Q 2014, a 34% decrease from the previous quarter. Exit Opportunities for U.S. VC-backed Companies ( ) 2Q'14 1Q'14 4Q'13 3Q'13 2Q'13 1Q'13 4Q'12 3Q'12 2Q'12 1Q'12 4Q'11 3Q'11 2Q' Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 IPOs M&As

16 LIQUIDITY U.S. VC-backed M&As ( ) 108 M&As of venture-backed companies in U.S. garnered $12.6 billion during 2Q In contrast with 1Q 2014, when a total of 128 transactions accumulated almost $17 billion, both number of M&As and amount raised fell by 16% and 26% respectively. The largest M&A of the quarter was Oculus VR Inc., which was acquired by Facebook Inc. (Nasdaq: FB) for $2 billion. U.S. VC-backed M&A Activity ( ) $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Paid ($B) $11.98 $13.58 $9.69 $10.41 $11.95 $11.74 $8.91 $5.59 $9.21 $11.33 $14.14 $16.97 $12.64 Number of M&As

17 Top 3 U.S. M&As (2Q 2014) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M) Acquirer Oculus VR Inc. Irvine, CA Provider of virtual reality gaming technology. Sports/Leisure Goods Personal Goods Consumer Goods 4/25/2014 Acquisition $2, Facebook Inc. Ability Network Inc. Minneapolis, MN Provider of a Web-based health network. Healthcare Administration Software Medical Software and Information Services Healthcare 4/7/2014 Acquisition $ Summit Partners Maker Studios Inc. Culver City, CA Provider of a multichannel network. Communications and Networking: Other Communications and Networking Information Technology 6/2/2014 Acquisition $ Walt Disney Co. 17

18 LIQUIDITY U.S. VC-backed IPOs ( ) 25 venture-backed companies raised almost $2.2 billion through public offerings in 2Q Number of deals decreased by 34% and capital raised also registered a 26% decrease from the previous quarter. The largest IPO of the quarter was GoPro Inc. (NASDAQ:GPRO), which completed a $427 million IPO. U.S. VC-backed IPO Activity ( ) $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Raised ($B) through IPO $1.71 $0.43 $2.37 $1.42 $7.75 $0.81 $1.22 $0.64 $1.80 $2.22 $3.55 $2.94 $2.18 Number of IPOs

19 Top 3 U.S. IPOs (2Q 2014) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Raised through IPO ($M) Exchange GoPro Inc. San Mateo, CA Provider of photo and video solutions for capturing, managing, sharing, and enjoying content. Consumer Electronics Electronics and Computer Hardware Information Technology 6/24/2014 IPO $ NASDAQ: GPRO Arista Networks Inc. Santa Clara, CA Provider of cloud networking solutions. Fiberoptic Equipment Communications and Networking Information Technology 6/5/2014 IPO $ NYSE: ANET Kite Pharma Inc. Santa Monica, CA Developer of cancer immunotherapy products designed to harness the patient s own immune system to eradicate cancer cells. Biotechnology Therapeutics Biopharmaceuticals Healthcare 6/20/2014 IPO $ NASDAQ: KITE 19

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