venture capital reportimages.dowjones.com/company/wp-content/uploads/sites/15/...amounts raised...

Venture Capital Report

U.S. | 4Q | 2014

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 4Q 2014 include: U.S. venture capital fundraising rose both in number of funds and amount invested; Venture capital investment into U.S. companies experienced a quarter-over-quarter increase;

Median pre-money valuation increased 30% from 3Q 2014 and more than doubled the 2013 value; Amounts raised through both Initial public offerings (IPOs) and mergers and acquisitions (M&As) experienced an increase from the previous quarter.

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U.S. VC Fundraising (2011 – 2014) Based on multiple closings

Venture Fundraising Increases in U.S. during 4Q 2014 85 funds garnered $8.1 billion in 4Q 2014, a 25% increase in the amount raised and also a 4% rise in number of funds from the prior quarter. Venture capital funds have raised a total of almost $33 billion across 332 funds in 2014, up 62% from the total amount raised in 2013 and 27% in number of funds. Tiger Global Private Investment Partners IX LP was the largest U.S. venture capital fund of 4Q 2014 raising $2.5 billion and accounting for 31% of the total amount raised during the quarter. Median U.S. fund size was $110 million in 2014.

FUNDRAISING

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Amount Raised ($B) $7.23 $7.45 $6.57 $5.03 $3.07 $4.60 $6.69 $4.03 $5.03 $10.4 $7.98 $6.48 $8.13

Number of Funds 56 55 46 54 57 59 56 64 82 83 82 82 85

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Venture Capital Report Largest VC Funds Raised in 4Q 2014

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 IX LP $2,500.00 New York NY Closed MulD-‐stage

venture capital

Venture Capital Final

Canaan Partners Canaan X LP $675.00 Menlo Park CA Open Early-‐stage venture capital

Venture Capital First

FormaDon8 Partners LLC FormaDon8 Partners Fund II LP $500.00 San Francisco CA Closed Early-‐stage venture

capital


Polaris Partners Polaris Partners VII LP $465.00 Waltham MA Closed MulD-‐stage venture capital


Vivo Capital Vivo Capital Fund VIII LP $427.65 Palo Alto CA Closed MulD-‐stage venture capital


FUNDRAISING

4


FINANCING

Equity Financings into U.S. – based, VC-backed Companies (2011 – 2014)

U.S. Venture Investment on the Rise in 4Q 2014 U.S.-based companies raised $13.8 billion from 814 venture capital deals in 4Q 2014, an increase in capital (24%) despite deal flow dropping 12% from the previous quarter. Compared to the same period in 2013, number of deals decreased 20%, while amount invested registered a 44% increase. In 2014, 3682 deals have been completed raising $52 billion, a respective 4% decrease and 47% increase on figures posted in 2013.

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Amount Raised ($B) $8.19 $7.76 $9.62 $7.99 $9.27 $7.63 $8.73 $9.47 $9.64 $12.09 $15.00 $11.19 $13.84

Number of Deals 918 898 1018 937 932 913 953 958 1013 945 995 928 814

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Equity Financings into U.S.–based, VC–backed Companies, by Round Class (Quarter over Quarter, 2011 – 2014) Number of Deals

FINANCING

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Restart 11 11 14 11 18 7 7 8 10 8 8 6 6

Later 290 253 307 286 283 264 284 275 281 289 349 287 283

Second 150 142 181 146 160 146 203 197 210 184 218 194 166

First 319 309 354 325 313 340 308 332 368 318 329 340 292

Seed 104 138 121 122 108 121 120 108 91 102 55 67 40

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Equity Financings into U.S.–based, VC–backed Companies, by Round Class (Year over Year, 2004 – 2014 ) Number of Deals

FINANCING

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Restart 177 175 147 118 100 95 63 62 54 32 28

Later 789 826 902 952 937 965 1110 1144 1129 1104 1208

Second 492 487 593 601 628 643 628 630 629 756 762

First 723 863 911 1114 1091 788 970 1228 1301 1348 1279

Seed 105 106 168 215 207 181 267 447 489 440 264

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1000 1100 1200 1300 1400 1500


FINANCING

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Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2011 – 2014) Amount Raised ($B)

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Restart $0.08 $0.09 $0.16 $0.24 $0.69 $0.08 $0.18 $0.08 $0.10 $0.29 $0.17 $0.06 $0.10

Later $4.72 $4.19 $5.42 $4.70 $4.51 $4.48 $4.93 $5.22 $5.25 $6.80 $9.99 $5.99 $8.57

Second $1.49 $1.10 $1.64 $1.26 $1.38 $1.31 $1.75 $1.57 $1.88 $1.94 $2.64 $1.88 $2.51

First $1.53 $1.46 $1.98 $1.43 $1.73 $1.50 $1.36 $1.74 $1.99 $1.62 $1.91 $2.04 $2.16

Seed $0.10 $0.10 $0.10 $0.10 $0.09 $0.08 $0.09 $0.09 $0.08 $0.09 $0.07 $0.08 $0.04

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FINANCING

Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M) (2011 – 2014) Median Equity Deal Size ($M)

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Median Equity Deal Size ($M) $4.00 $3.80 $4.58 $3.66 $4.17 $4.00 $4.44 $3.64 $4.18 $4.15 $6.27 $5.00 $6.80

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23%

2%

27% 4%

18%

2%

24%

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

206

25

159

13 143

23

245


Consumer Goods

Consumer Services

Energy & Utilities

Healthcare



Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (4Q 2014) Consumer Services saw the largest investment allocation, with 159 deals garnering almost $3.8 billion and accounting for 27% of total equity investment. Information Technology (IT) raised the second highest proportion of investment for 4Q’14. IT companies drew $3.3 billion across 245 deals, up 52% and 13% from respective 3Q’14 figures. Business and Financial Services placed third with $3.2 billion in 206 deals, increasing 4% from the $3.1 billion accumulated in the previous quarter, despite a 23% drop in number of deals. $2.5 billion were raised by the Healthcare sector in 143 deals, down both in capital invested and deal flow (8% and 23%, respectively). In 2014 as a whole, Business and Financial Services took a 26% share of investment ($13.7 billion), IT a 24% ($12.3 billion), Consumer Services a 23% ($11.9 billion), and Healthcare a 21% ($11 billion).

4Q'14 Industry Breakdown By Number of Deals

4Q’14 Industry Breakdown By Amount Raised ($B)

FINANCING

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26%

2%

23% 2%

21%

2%

24%


Consumer Goods

Consumer Services

Energy & Utilities

Healthcare



991

135

700 58

731

91

966


Consumer Goods

Consumer Services

Energy & Utilities

Healthcare



Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (2014)

2014 Industry Breakdown By Number of Deals

2014 Industry Breakdown By Amount Raised ($B)

FINANCING

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Co. Name Loca@on Industry Group

Industry Segment Industry Code Brief Descrip@on Close Date Round Type Raised

($M) Round Investors (* denotes lead)

Uber Technologies

Inc.

San Francisco, CA

Consumer Services Travel and Leisure TransportaDon

Services

Provider of an on-‐demand transportaDon service

plaYorm. 12/4/2014 6th $1200.00

Lone Pine Capital, New Enterprise Associates Inc., Qatar Investment Authority, Valiant Capital Management

LP

Magic Leap Inc.

Dania Beach, FL

InformaDon Technology

Electronics and Computer Hardware

Displays Developer of an

augmented reality visual compuDng system.

10/21/2014 2nd $542.00

Andreessen Horowitz, Google Inc.*, Kleiner Perkins Caufield

& Byers, Kohlberg Kravis Roberts & Co. LP, Legendary Entertainment Inc., Obvious Ventures Management LLC,

Qualcomm Inc., Vulcan Capital

Snapchat Inc. Venice, CA Consumer Services

Consumer InformaDon Services

Email/Messaging Provider of an ephemeral

messaging mobile applicaDon.

12/31/2014 4th $485.63 Kleiner Perkins Caufield & Byers*, Yahoo!

WeWork Companies Inc. New York, NY


Financial InsDtuDons and

Services Real Estate Provider of shared office

space. 12/15/2014 Later $355.00

Benchmark Capital, Goldman Sachs Group Inc.*, Harvard Management Co., JPMorgan Chase & Co., T. Rowe Price Group Inc.*, Wellington Management Co. LLP*

Sunnova Energy Corp. Houston, TX Energy and

UDliDes Renewable Energy Solar Energy Provider of residenDal solar services.

11/20/2014 First Round $250.00 Franklin Square Capital Partners*, Triangle Peak

Partners LP

Top 5 Deals into VC-backed Companies (4Q 2014)

FINANCING

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Most Active Investors for U.S.-based, VC-backed Companies (4Q 2014)

FINANCING

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New Enterprise Associates Inc.

Khosla Ventures Andreessen Horowitz Kleiner Perkins Caufield & Byers

Sequoia Capital


Amount Raised ($B) in 4Q 2014 by Primary Region

Number of Deals by Primary Region 4Q 2014 0 155 14 56 41 87 284 29 33 50 65

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 4Q 2014 $0.00 $1.85 $0.12 $0.57 $0.39 $1.28 $5.64 $0.46 $0.62 $1.13 $1.08

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 4Q 2014 by Primary Region

FINANCING

14

Alaska/Islands

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California


$0.42

$0.08

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$0.78

$0.33

$1.33

$1.11

$5.63

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

Amount Raised ($B) by subregion

Subregion Breakout Amount Raised ($B)

Number of Deals by subregion 4Q 2014

Amount Raised ($B) by subregion 4Q 2014

Subregion Breakout Number of Deals

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104

78

281

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

Number of Deals by Subregion

FINANCING

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San Francisco Bay Area 281 $5.63 Boston Metro 78 $1.11 New York Metro 104 $1.33 Potomac 28 $0.33 Los Angeles Metro 33 $0.78 San Diego Metro 17 $0.16 Orange County 14 $0.12 Seattle Metro 21 $0.40 Austin Metro 10 $0.13 Dallas-Fort Worth 12 $0.08 Chicago Metro 22 $0.42


VALUATIONS

Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M) (2011 – 2014)

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Median Pre-money Valuation ($M) $21.28 $18.05 $18.63 $29.10 $39.51 $17.75 $24.20 $15.80 $21.63 $24.63 $50.50 $35.00 $45.60

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LIQUIDITY

Exit Opportunities for U.S. VC-backed Companies (2011 – 2014)

Venture M&A and IPO Market Activity in the U.S. during 4Q 2014 Mergers and acquisitions (M&As) of venture-backed companies increased by 60% from 3Q 2014, with 102 deals garnering $32 billion. Initial public offering (IPO) activity increased in 4Q 2014 raising $3 billion, up 134% from the previous quarter.

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0 20 40 60 80 100 120 140 160

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 IPOs 10 20 12 10 8 9 20 25 20 38 24 22 21

M&As 142 114 125 108 126 100 93 125 131 128 121 132 102


U.S. VC-backed M&A Activity (2011 - 2014)

U.S. VC-backed M&As (2011-2014) 102 M&As raised $32 billion during 4Q 2014, a 60% increase in M&A valuations despite the number of deals decreasing 23% compared to the previous quarter, when 132 M&As garnered $20 billion. The largest M&A of the quarter was WhatsApp Inc., which was acquired by Facebook (NASDAQ: FB) for $19 billion. 483 M&As were completed for venture-backed companies in the U.S. during 2014, up 8% from the 449 completed during 2013 and 2% from the 473 seen during 2012.

LIQUIDITY

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Amount Paid ($B) $9.66 $10.35 $11.77 $11.75 $8.49 $5.63 $9.15 $12.44 $14.09 $16.16 $11.15 $20.13 $32.31

Number of M&As 142 114 125 108 126 100 93 125 131 128 121 132 102

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Venture Capital Report Top 3 U.S. M&As (4Q 2014)

Company Name Loca@on Brief Descrip@on Industry Code Industry

Segment Industry Group Close Date Round Type Amount

Paid ($M) Acquirer

WhatsApp Inc. Santa Clara, CA Developer of cross-‐plaYorm mobile

applicaDon soiware.

CommunicaDons Soiware Soiware InformaDon

Technology 10/6/2014 AcquisiDon $19.000.00 Facebook Inc.

Alios BioPharma Inc.

South San Francisco, CA

Developer of medicines aimed at the treatment of

viral diseases.

Biotechnology TherapeuDcs BiopharmaceuDcals Healthcare 11/7/2014 AcquisiDon $1750.00 Johnson &

Johnson Inc.

Ebates Inc. San Francisco, CA

Provider of online cash back shopping services. Shopping Facilitators Consumer

InformaDon Services Consumer Services 10/9/2014 AcquisiDon $981.00 Rakuten Inc.

LIQUIDITY

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U.S. VC-backed IPO Activity (2011 - 2014)

U.S. VC-backed IPOs (2011-2014) 21 venture-backed companies raised $3 billion through public offerings in 4Q 2014. Number of listings decreased by 5%, while capital raised more than doubled the amount from the previous quarter. The largest IPO of the quarter was LendingClub Corp. (NYSE: LC), which completed a $870 million IPO. 2014 saw the highest number of US VC-backed IPOs since 2000, when 210 were completed. During 2014,105 companies garnered a total of $9.2 billion, an increase of 42% and 12% from respective 2013 figures.

LIQUIDITY

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4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Raised ($B) through IPO $2.37 $1.42 $7.75 $0.81 $1.22 $0.64 $1.80 $2.22 $3.55 $2.94 $1.96 $1.30 $3.04

Number of IPOs 10 20 12 10 8 9 20 25 20 38 24 22 21

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Company Name Loca@on Brief Descrip@on Industry Code Industry

Segment Industry Group Close Date Round

Type

Raised through IPO

($M) Exchange

LendingClub Corp.

San Francisco, CA

Operator of an online marketplace connecDng borrowers and lenders.

Lending Financial InsDtuDons and Services


12/11/2014 IPO $870.00 NYSE: LC

Wayfair Inc. Boston, MA Provider of an online retail

plaYorm for home furnishings and decor.

Household Goods/Services Retailers Retailers Consumer

Services 10/2/2014 IPO $319.00 NYSE: W

Juno TherapeuDcs Inc. Seakle, WA Developer of medicines to

treat cancer. Biotechnology TherapeuDcs BiopharmaceuDcals Healthcare 12/19/2014 IPO $264.55 NASDAQ: JUNO

Top 3 U.S. IPOs (4Q 2014)

LIQUIDITY

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ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development execu@ves, investment bankers and service providers find deal and partnership opportuni@es, 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 execu@ves – 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 execu@ves, and from secondary sources. These venture capital sta@s@cs cover equity investments into early stage, innova@ve companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at @me of editorial but are subject to change without no@ce. No statement herein is to be construed as a recommenda@on to buy or sell securi@es or to provide investment advice. About Dow Jones Dow Jones & Company is a global provider of news and business informaDon, delivering content to consumers and organizaDons via newspapers, Web sites, apps, video, newslekers, magazines, proprietary databases, conferences, and radio. Dow Jones has produced unrivaled quality content for 125 years and today has one of the world’s largest news-‐gathering operaDons with nearly 2,000 journalists in more than 80 bureaus, including The Wall Street Journal, America’s largest newspaper by paid circulaDon. Other premier brands include FacDva, Barron’s, MarketWatch, DJX, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones VentureSource. Dow Jones publishes in 13 languages and distributes content in 28 languages, combining technology with news and data to support business decision making. The company pioneered the first successful paid online news site and its industry leading innovaDon enables it to serve customers wherever they may be, via the Web, mobile devices, Internet-‐connected televisions, and tablets. MEDIA CONTACT: Erin Maier 212.416.4874 [email protected]

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