venture capital report - dow jones &...

Venture Capital Report

U.S. | 1Q | 2015

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 1Q 2015 include: U.S. venture capital fundraising decreased both in number of funds and amount invested; Venture capital investment into U.S. companies experienced a minimal increase quarter-over-quarter ;

Median pre-money valuation increased 29% from 4Q 2014; Amounts raised through both Initial public offerings (IPOs) and mergers and acquisitions (M&As) experienced a decrease from the previous quarter.

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U.S. VC Fundraising (2012 – 2015) Based on multiple closings

Venture Fundraising Increases in U.S. during 1Q 2015 56 funds garnered $8.1 billion in 1Q 2015, a 2% decrease in the amount raised, and also a 42% drop in number of funds from the prior quarter. Bessemer Venture Partners IX LP was the largest U.S. venture capital fund of 1Q 2015 raising $1.6 billion and accounting for 20% of the total amount raised during the quarter. Median U.S. fund size was $121 million in the first quarter of 2015.

FUNDRAISING

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Amount Raised ($B) $7.45 $6.60 $5.04 $3.63 $4.60 $6.69 $4.10 $5.04 $10.4 $8.08 $6.49 $8.29 $8.10

Number of Funds 55 48 54 59 60 56 65 82 81 86 84 97 56

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Venture Capital Report Largest VC Funds Raised in 1Q 2015

Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type

Bessemer Venture Partners Bessemer Venture Partners IX LP $1,600.00 Larchmont NY Closed MulA-‐stage

venture capital

Venture Capital Final

Insight Venture Partners Insight Venture Partners IX LP $1,512.04 New York NY Open Late-‐stage venture

capital

Venture Capital First

OrbiMed Advisors LLC OrbiMed Royalty OpportuniAes II LP $924.00 New York NY Closed Late-‐stage venture

capital


Insight Venture Partners Insight Venture Partners (Cayman) IX LP $596.00 New York NY Open Late-‐stage venture

capital

Venture Capital First

Flagship Ventures Flagship Ventures Fund V LP $537.00 Cambridge MA Closed Early-‐stage venture capital


FUNDRAISING

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FINANCING

Equity Financings into U.S. – based, VC-backed Companies (2012 – 2015)

U.S. Venture Investment in 1Q 2015 Registers Slight Improvement from 4Q 2014 U.S.-based companies raised $15.7 billion in 875 venture capital deals in 1Q 2015, a 1% rise in capital raised, however, the number of deals fell slightly (2%) from the previous quarter. Compared to the same period in 2014, amount invested went up 27%, while number of deals registered a 9% decrease. Healthcare and Business and Financial Services are the strongest sectors, respectively with 25% and 24% share of total amount invested.

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Amount Raised ($B) $7.76 $9.65 $8.18 $9.14 $7.67 $8.83 $9.40 $9.72 $12.41 $15.21 $11.45 $15.57 $15.72

Number of Deals 898 1022 942 937 921 960 960 1025 960 1010 944 890 875

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1200

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$18.00


Equity Financings into U.S.–based, VC–backed Companies, by Round Class (Quarter over Quarter, 2012 – 2015) Number of Deals

FINANCING

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Restart 11 14 11 18 7 7 8 11 8 8 8 6 6

Later 252 308 285 282 264 286 274 279 292 353 288 307 308

Second 143 182 147 161 148 203 199 212 189 218 197 180 219

First 309 357 327 316 345 310 332 379 323 337 339 323 277

Seed 138 121 122 110 123 123 108 93 102 55 76 41 44

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FINANCING

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Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2012 – 2015) Amount Raised ($B)

1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Restart $0.08 $0.16 $0.24 $0.69 $0.08 $0.18 $0.08 $0.11 $0.29 $0.17 $0.11 $0.10 $0.04

Later $4.16 $5.43 $4.79 $4.34 $4.48 $4.96 $5.14 $5.25 $7.01 $10.10 $6.19 $10.01 $9.58

Second $1.13 $1.66 $1.32 $1.41 $1.34 $1.81 $1.59 $1.91 $1.97 $2.66 $1.94 $2.68 $3.13

First $1.46 $1.97 $1.45 $1.75 $1.50 $1.37 $1.73 $2.04 $1.70 $1.99 $2.02 $2.26 $2.01

Seed $0.10 $0.10 $0.10 $0.09 $0.09 $0.10 $0.10 $0.09 $0.08 $0.07 $0.10 $0.05 $0.05

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FINANCING

Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M) (2012 – 2015) Median Equity Deal Size ($M)

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Median Equity Deal Size ($M) $3.80 $4.51 $3.66 $4.08 $4.00 $4.43 $3.62 $4.23 $4.31 $6.29 $5.00 $6.60 $6.64

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24%

1%

23%

1%

25%

8%

18% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

230

22

156

16 185

24

240

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (1Q 2015) Healthcare received the largest investment allocation during 1Q’15 (25%), accumulating $3.9 billion through 185 deals. The figures represent a respective increase of 50% and 19% from 4Q’14. The Business and Financial sector placed second in terms of equity financing, taking a 24% share of all 1Q’15 investment. 230 deals drew $3.7 billion, up 4% in capital raised. Consumer Services ranked third with almost $3.7 billion in 156 deals, dropping 17% from the $4.4 billion accumulated in the previous quarter. The sector’s investment figure represents a 23% share of total equity investment into U.S. VC-backed companies for the quarter. $2.8 billion were raised by Information Technology (IT) in 240 deals, a decrease of 26% in capital invested and 9% in deal flow.

1Q'15 Industry Breakdown By Number of Deals

1Q’15 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)

Space ExploraAon Technologies

Corp.

Hawthorne, CA

Industrial Goods and Materials

Aerospace and Defense Satellites/Spacecra_ Provider of space launch services.

1/19/2015 Later $1,000.00

Capricorn Capital Partners, Draper Fisher Jurvetson,

Fidelity Investments, Founders Fund LLC, Google Inc.*, Valor

Equity Partners

Ly_ Inc. San Francisco, CA

Consumer Services Travel and Leisure TransportaAon

Services

Provider of an on-‐demand ridesharing service

placorm. 3/12/2015 6th $530.00

Alibaba Group Holding Ltd., Andreessen Horowitz, Fortress

Investment Group LLC, Rakuten Inc.*, Third Point

Reinsurance Ltd.

Moderna LLC Cambridge, MA Healthcare BiopharmaceuAcals Biotechnology

TherapeuAcs

Developer of injectable messenger RNA (mRNA) molecules that trigger producAon of protein drugs in the body.

1/5/2015 4th $450.00

Alexion PharmaceuAcals, AstraZeneca Plc, Invus Group, RA Capital Management LLC, Viking Global Investors LP, Wellington Management Co.

LLP

Pinterest Inc. San Francisco, CA Consumer Services

Consumer InformaAon Services

Online CommuniAes Provider of a virtual pinboard.

2/27/2015 8th $367.10 Andreessen Horowitz, Bessemer Venture Partners

Dra_Kings Inc. Boston, MA Consumer Services

Consumer InformaAon Services

Entertainment Provider of a daily fantasy sports games placorm.

3/31/2015 Corporate $250.00 Walt Disney Co.*

Top 5 Deals into VC-backed Companies (1Q 2015)

FINANCING

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29

22 20

17 16

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New Enterprise Associates Inc.

Andreessen Horowitz First Round Capital Kleiner Perkins Caufield & Byers

Accel Partners

Most Active Investors for U.S.-based, VC-backed Companies (1Q 2015)

FINANCING

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Amount Raised ($B) in 1Q 2015 by Primary Region

Number of Deals by Primary Region 1Q 2015 0 170 18 46 44 102 297 35 43 50 68

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 1Q 2015 $0.00 $2.15 $0.16 $0.31 $0.80 $1.99 $5.92 $0.69 $0.81 $0.51 $2.37

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 2015 by Primary Region

FINANCING

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Alaska/Islands

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California


$0.10

$0.49

$0.24

$0.63

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$0.27

$1.78

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$1.78

$5.69

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 1Q 2015

Amount Raised ($B) by subregion 1Q 2015

Subregion Breakout Number of Deals

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104

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296

Chicago Metro

Dallas-Fort Worth

Austin Metro

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Los Angeles Metro

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San Francisco Bay Area

Number of Deals by Subregion

FINANCING

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San Francisco Bay Area 296 $5.69 Boston Metro 93 $1.78 New York Metro 104 $1.55 Potomac 32 $0.30 Los Angeles Metro 40 $1.78 San Diego Metro 16 $0.27 Orange County 9 $0.10 Seattle Metro 26 $0.63 Austin Metro 25 $0.24 Dallas-Fort Worth 6 $0.49 Chicago Metro 11 $0.10


VALUATIONS

Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M) (2012 – 2015)

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Median Pre-money Valuation ($M) $20.00 $18.63 $27.05 $38.13 $21.00 $24.80 $16.80 $21.63 $25.00 $50.00 $38.33 $52.00 $67.14

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LIQUIDITY

Exit Opportunities for U.S. VC-backed Companies (2012 – 2015)

Venture M&A and IPO Market Activity in the U.S. during 1Q 2015 Mergers and acquisitions (M&As) of venture-backed companies dropped 71% from 4Q 2014, with 104 deals garnering $9.9 billion. Initial public offering (IPO) activity decreased in 1Q 2015 raising $912 million, down 71% from the previous quarter.

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0 20 40 60 80 100 120 140 160

1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15

1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 IPOs 20 12 10 8 9 20 25 20 38 24 22 23 12

M&As 114 127 110 126 102 94 125 131 128 122 134 109 104


U.S. VC-backed M&A Activity (2012 - 2015)

U.S. VC-backed M&As (2012-2015) 104 M&As of venture-backed companies in the U.S. garnered $9.9 billion during 1Q 2015. In contrast with 4Q 2014, when a total of 109 transactions accumulated almost $34 billion, both number of deals and amount raised decreased by 5% and 71% respectively. The largest M&A of the quarter was Flexus Biosciences Inc., which was acquired by Bristol-Myers Squibb (XNYS:BMY) for $1.25 billion.

LIQUIDITY

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Amount Paid ($B) $10.35 $11.83 $11.85 $8.92 $5.67 $9.19 $12.44 $14.09 $15.83 $11.19 $20.27 $33.84 $9.90

Number of M&As 114 127 110 126 102 94 125 131 128 122 134 109 104

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Venture Capital Report Top 3 U.S. M&As (1Q 2015)

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

Segment Industry Group Close Date Round Type Amount

Paid ($M) Acquirer

Flexus Biosciences Inc. San Carlos, CA Developer of anA-‐cancer

therapeuAcs. Biotechnology TherapeuAcs BiopharmaceuAcals Healthcare 3/23/2015 AcquisiAon $1,250.00 Bristol-‐Myers

Squibb Company

MyFitnessPal Inc. San Francisco, CA

Provider of a nutriAon and fitness tracking applicaAon.

RecreaAonal/Home So_ware So_ware InformaAon

Technology 04/02/2015 AcquisiAon $475.00 Under Armour

Freightquote.com Inc. Lenexa, KS

Provider of Web-‐based freight transportaAon

management services for small businesses.

Procurement/Supply Chain

Business Support Services

Business and Financial Services 3/23/2015 AcquisiAon $365.00 C.H Robinson

Worldwide Inc.

LIQUIDITY

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U.S. VC-backed IPO Activity (2012 - 2015)

U.S. VC-backed IPOs (2012-2015) 12 venture-backed companies raised $912 million through public offerings in 1Q 2015. Number of deals decreased by 48% and capital raised registered a 71% drop from the previous quarter. The largest IPO of the quarter was Box Inc. (NYSE: BOX), which completed a $175 million IPO.

LIQUIDITY

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1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Raised ($B) through IPO $1.42 $7.75 $0.81 $1.22 $0.64 $1.80 $2.22 $3.55 $2.94 $1.96 $1.30 $3.15 $0.91

Number of IPOs 20 12 10 8 9 20 25 20 38 24 22 23 12

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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

Box Inc. Los Altos, CA

Provider of a cloud-‐based, mobile-‐opAmized placorm that gives organizaAons of

all sizes the ability to manage their content and collaborate internally and

externally.

Data Management Services

Business Support Services

Business and Financial Services 1/23/2015 IPO $175.00 NYSE: BOX

Spark TherapeuAcs Inc.

Philadelphia, PA

Developer of therapeuAcs for paAents suffering from

debilitaAng geneAc diseases.

Biotechnology TherapeuAcs BiopharmaceuAcals Healthcare 1/30/2015 IPO $161.00 NASDAQ: ONCE

Invitae Corp. San Francisco, CA

Provider of geneAc informaAon services. Medical/Lab Services Healthcare Services Healthcare 2/12/2015 IPO $101.60 NYSE: NVTA

Top 3 U.S. IPOs (1Q 2015)

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 is a global provider of news and business informaAon, delivering content to consumers and organizaAons around the world across mulAple 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 operaAons with nearly 2,000 journalists in more than 75 bureaus globally. It produces leading publicaAons and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulaAon; FacAva, Barron’s, MarketWatch, Financial News, DJX, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones VentureSource. MEDIA CONTACT: Rachel Manfredo 212.416.3834 [email protected]

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