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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 . | 3 Q | 2 0 1 9


VENTURE CAPITAL REPORT

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital investment, fundraising, and liquidity. The

included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2019 include:

• Equity investment retreated from recent highs, but still remained strong, with $27.53 billion invested in 1,295 deals.

• The IPO market turned in another powerful performance with $6 billion raised this quarter, and 2019 has already set a new annual record.

• M&A activity dipped modestly from the previous quarter, with $26.93 billion invested in 163 transactions.

• VC fundraising dipped slightly from 2Q but remained at historically high levels, with $12.04 billion raised across 126 fund closings.

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VC INVESTMENT PULLS BACK FROM RECENT HIGHS, BUT REMAINS ROBUST

VC-backed startups received $27.53 billion in 1,295

rounds this quarter, a noticeable decline of 17% and

14%, respectively, from 2Q. While the amount raised

was the lowest in nearly two years, it’s important to put

this figure in perspective: it qualified as the 9th largest

quarterly total on record, dating back to 1992. The

number of deals, however, was the smallest since 1Q

2014.

The top deal of the quarter went to San Francisco-based

OpenAI LP, which received corporate equity financing of

$1 billion from Microsoft.

3

FINANCING

Equity Financings in U.S.-Based,

VC-Backed Companies (2016–2019)

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Amount Raised ($B) $19.34$14.86$20.74$22.04$24.03$22.70$27.86$30.23$33.01$44.70$32.89$33.10$27.53

Number of Deals 1463 1328 1523 1577 1544 1419 1691 1692 1600 1532 1398 1504 1295

0

200

400

600

800

1000

1200

1400

1600

1800

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00


TOP ROUNDS FOR VC-BACKED COMPANIES (3Q 2019)

4

FINANCING

Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M)Round Investors

(* denotes lead)

OpenAI LPSan

Francisco, CA

Systems

SoftwareSoftware

Information

Technology

Provider of

artificial

intelligence

research

principles.

7/22/2019Corporate

Equity$1,000.00 Microsoft Corp.

Radiology

Partners Inc.

El Segundo,

CA

Outpatient

Facilities

Healthcare

ServicesHealthcare

Provider of

professional

radiology services.

7/19/2019 VC 4th $700.00 Starr Investment Holdings LLC*

Knotel Inc. New York, NY

Facilities/

Operations

Management

Business

Support

Services

Business

and

Financial

Services

Provider of flexible

office space.8/21/2019 VC 3rd $400.00

Wafra Inc.*; Rocket Internet AG; Norwest Venture

Partners; Newmark Knight Frank; Mori Trust Co.

Ltd.; Mercuria Investment Co. Ltd.; ITOCHU Corp.;

Bloomberg Beta

Urban Compass

Inc.New York, NY

Shopping

Facilitators

Consumer

Information

Services

Consumer

Services

Provider of a real

estate purchase

and rental

platform.

7/30/2019 VC 8th $370.00

SoftBank Vision Fund; Qatar Investment Authority;

Dragoneer Investment Group; Canada Pension

Plan Investment Board

Root Insurance

Co.

Columbus,

OHInsurance

Financial

Institutions and

Services

Business

and

Financial

Services

Provider of a car

insurance portal.9/3/2019 VC 5th $350.00

Tiger Global Management LLC; Scale Venture

Partners; Ribbit Capital LP; Redpoint Ventures;

DST Global*; Drive Capital LLC; Coatue

Management LLC*


IT & BUSINESS SERVICES COMPANIES SPLIT LION’S SHARE OF VC FUNDING IN 3Q

IT companies once again grabbed the largest portion of VC deals

and dollars in 3Q, with $7.92 billion across 408 rounds. OpenAI had

the top deal in this sector (as well as the quarter overall), raising $1

billion.

Companies in the Business & Financial Services group came in

second place, securing $7.08 billion in 299 deals. New York-based

Knotel Inc. took the largest round in this space, with a $400 million

3rd round to fund its flexible office space services.

The Healthcare sector followed closely behind, raising $5.19 billion

across 242 deals. Radiology Partners Inc., an El Segundo-based

provider of professional radiology services delivered through a

technology-enabled national group practice, secured the top

financing in this sector.

5

FINANCING

Industry

Breakdown

By Number

of Deals

Industry

Breakdown

By Amount

Raised ($B)

299

86

184

15242

55

408

Business & Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

26%

3%

18%

1%19%

4%

29%

Business & Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology


MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (3Q 2019)

6

FINANCING

35

23

1918

17

15 1514 14

13

0

5

10

15

20

25

30

35

40

Y Combinator Accel Partners Andreessen Horowitz Sequoia Capital Joyance PartnersLLC

New EnterpriseAssociates Inc.

Norwest VenturePartners

Bessemer VenturePartners

Kleiner PerkinsCaufield & Byers

Founders Fund LLC


NUMBER OF DEALS/AMOUNT RAISED BY METRO REGION (3Q 2019)

7

FINANCING

Metro Region Breakout

Number of Deals

Metro Region Breakout

Amount Raised ($B)

9

13

26

33

34

34

53

74

92

180

404

Orange County

Dallas-Fort Worth

Austin

San Diego

Chicago

Potomac

Seattle

Boston

Los Angeles

New York

San Francisco Bay Area

Number of Deals by Metro Region

$0.17

$0.28

$0.31

$0.53

$0.64

$0.71

$0.86

$1.73

$2.78

$3.61

$11.63

Orange County

Dallas-Fort Worth

Austin

Potomac

Chicago

Seattle

San Diego

Boston

Los Angeles

New York

San Francisco Bay Area

Amount Raised ($B) by Metro Region


NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (3Q 2019)

8

FINANCING

Number of

Deals by

Primary Region

Amount Raised

($B) by Primary

Region

Number of Deals

by Primary Region

265

28

93

93

89

410

65

53

58

137

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

$4.62

$0.47

$1.25

$1.08

$1.79

$11.73

$0.91

$0.72

$1.04

$3.86

43%

17%

14%

6%

4%

4%4%

3%3%

2% Northern California

Mid-Atlantic

Southern California

New England

Midwest East

Mountain

South East

Pacific Northwest

South Central

Midwest Central

32%

21%11%

7%

7%

7%

5%

4% 4%2%

Northern California

Mid-Atlantic

Southern California

Mountain

Midwest East

New England

Pacific Northwest

South East

South Central

Midwest Central


MEDIAN DEAL SIZE FOR EQUITY FINANCINGS IN U.S. COMPANIES

9

FINANCINGMedian Equity Deal Size ($M)

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Median Equity Deal Size ($M) $4.00 $4.00 $4.10 $5.00 $4.54 $5.00 $5.00 $6.00 $5.25 $6.00 $6.00 $7.70 $7.50

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00


Number of Deals

COUNT OF EQUITY FINANCINGS IN U.S. COMPANIES, BY ROUND CLASS

1 0

FINANCING

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Seed 125 133 158 188 183 171 185 208 184 146 107 131 119

First 403 373 376 409 349 316 381 413 343 378 355 398 346

Second 228 205 241 227 241 215 258 238 235 191 226 236 209

Later 440 357 415 379 381 363 449 453 439 434 393 463 333

Restart 4 1 6 3 4 0 2 0 4 0 4 2 1

0

50

100

150

200

250

300

350

400

450

500


Amount Raised ($B)

AMOUNT RAISED IN U.S. COMPANIES, BY ROUND CLASS

1 1

FINANCING

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Seed $0.17 $0.23 $0.29 $0.40 $0.41 $0.41 $0.44 $0.58 $0.40 $0.43 $0.31 $0.36 $0.44

First $3.37 $2.78 $3.74 $3.73 $2.87 $3.74 $4.69 $4.47 $5.26 $5.31 $3.43 $4.90 $3.95

Second $2.68 $2.20 $4.13 $3.43 $3.99 $3.48 $5.20 $3.93 $5.00 $3.22 $7.83 $4.43 $3.44

Later $11.42 $7.32 $9.81 $12.40 $13.84 $12.81 $14.68 $18.07 $17.74 $18.08 $14.17 $20.26 $14.99

Restart $0.55 $0.01 $0.08 $0.08 $0.04 $0.00 $0.03 $0.00 $0.04 $0.00 $0.07 $0.12 $0.02

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00


VC FUNDRAISING DIPS SLIGHTLY IN 3Q, BUT REMAINS AT HISTORICALLY HIGH LEVELS

1 2

FUNDRAISING

U.S. VC Fundraising (2016–2019)

Based on multiple closings

VC fundraising declined for the third consecutive quarter,

with 22% fewer fund closings and a 3% dip in the total

amount raised compared to 2Q. Nevertheless, the

amount raised this quarter rests slightly above the

previous 12-quarter average. If current trends continue,

2019 is on track to achieve the third-largest fundraising

totals on record, after 2000 and 2018.

Greenwich, CT-based Oak HC/FT had the top fund

closing of the quarter, with its $800 million final close of

Oak HC/FT Partners III LP.

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Amount Raised ($B) $8.95 $10.41 $8.47 $14.88 $9.90 $6.07 $9.02 $17.14$13.18$17.00$16.16$12.44$12.04

Number of Funds 112 136 155 146 116 130 144 149 154 142 145 161 126

0

20

40

60

80

100

120

140

160

180

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00


TOP U.S. VC FUND CLOSINGS IN 3Q 2019

1 3

FUNDRAISING

Firm Name Fund Name Amount

Closed ($M)Location Offering Status Fund Type Closing Type

Oak HC/FTOak HC/FT Partners III

LP$800.00 Greenwich, CT Closed

Multi-Stage

Venture CapitalFinal

DCM Ventures DCM IX LP $762.79 Menlo Park, CA OpenEarly-Stage

Venture CapitalFirst

EW Healthcare PartnersEW Healthcare Partners

Fund 2 LP$746.33 New York, NY Closed

Multi-Stage


DCVC Management Co.

LLCDCVC V LP $725.00

San Francisco,

CAClosed

Early-Stage


Coatue Management LLCCoatue Venture Capital

Fund I$700.00 New York, NY Closed

Early-Stage



EXIT ACTIVITY PULLS BACK IN 3Q AFTER RECORD QUARTER

Just one quarter after the most active period on

record for VC-backed exits, 3Q drifted back down to

earth with the lowest number of liquidity events since

1Q 2016. The number of IPOs was slightly above

the previous 12-quarter average, while the count of

M&As fell 12% below the average.

1 4

LIQUIDITY

Exit Opportunities for U.S. VC–Backed Companies (2016–2019)

0 50 100 150 200 250

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

4Q'17

1Q'18

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

3Q'19

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

IPOs 14 10 7 21 7 25 16 30 22 14 10 32 19

M&As 185 176 187 167 186 191 190 192 178 197 175 200 163


M&A MARKET DIPS MODESTLY IN 3Q

The amount paid in M&A deals for VC-backed

companies declined from 2Q, with $26.93 billion

invested in 163 deals. This amount is 9% below the

previous 12-quarter average, indicating a modest

pullback in buyer interest. Although the number of

transactions was the lowest in 4 years, 2019 will be

guaranteed a place in the top 4 for largest annual

amount paid on record.

The largest deal of the quarter was

the buyout of Chicago-based GoHealthInsurance.com

by Centerbridge Partners LP for $1.5 billion.

1 5

LIQUIDITY

U.S. VC-Backed M&A Activity (2016–2019)

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Amount Paid ($B) $36.54 $31.88 $23.77 $19.94 $21.35 $26.78 $30.61 $36.58 $26.93 $36.96 $28.15 $35.09 $26.93

Number of M&As 185 176 187 167 186 191 190 192 178 197 175 200 163

0

20

40

60

80

100

120

140

160

180

200

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00


TOP U.S. VC-BACKED M&As IN 3Q 2019

1 6

LIQUIDITY

Company Name Location Brief Description Industry Code Industry Segment Industry Group Close DateAmount

Paid ($M)Acquirer

GoHealthInsurance

.comChicago, IL

Operator of an online

marketplace for health

insurance coverage.

Shopping

Facilitators

Consumer

Information Services

Consumer

Services8/19/2019 $1,500.00

Centerbridge

Partners LP

SignalFx Inc. San Mateo, CA

Provider of software to

manage and monitor

applications.

Database Software SoftwareInformation

Technology8/21/2019 $1,050.00 Splunk Inc.

Acquia Inc.* Boston, MA

Provider of an open-

source content

management system.

Data Management

Services

Business Support

Services

Business and

Financial Services9/24/2019 $1,000.00

Vista Equity Partners

Management LLC

CTRL-Labs Corp.* New York, NYProvider of a brain-

machine interface (BMI).

Consumer

Electronics

Electronics and

Computer Hardware

Information

Technology9/23/2019 $1,000.00 Facebook Inc.

Semma

Therapeutics Inc.*Cambridge, MA

Developer of stem cell-

based therapeutic

options for the treatment

of Type 1 Diabetes.

Biotechnology

TherapeuticsBiopharmaceuticals Healthcare 9/3/2019 $950.00

Vertex

Pharmaceuticals

*Deal pending regulatory approval


IPO MARKET SETS NEW ANNUAL RECORD, EASILY SURPASSING 2000

The IPO market continued to show great strength in

3Q, despite coming down from the heights of the

previous quarter’s anomalous Uber-driven total. The $6

billion raised at IPO was the 6th largest quarterly

amount on record. Even though the year is not yet

finished, 2019’s total has already smashed the previous

all-time annual record set in 2000 during the first dot-

com bubble.

The top offering of the quarter belonged to Nashville-

based SmileDirectClub LLC, a provider of direct-to-

consumer teeth aligners. Peloton Interactive Inc. had

the highest valuation of any company going public in

3Q, at $9.91 billion.

1 7

LIQUIDITY

U.S. VC-Backed IPO Activity (2016–2019)

3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19

Raised ($B) through IPO $1.07 $0.94 $3.95 $2.35 $0.58 $3.10 $1.75 $4.69 $2.32 $2.40 $3.34 $13.97 $6.00

Number of IPOs 14 10 7 21 7 25 16 30 22 14 10 32 19

0

5

10

15

20

25

30

35

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00


TOP U.S. VC-BACKED IPOs IN 3Q 2019

1 8

LIQUIDITY

Company

Name Location

Brief

Description

Industry

Code

Industry

Segment

Industry

Group

Close

Date

Raised

through IPO

($M)

Exchange

SmileDirectClub

LLCNashville, TN

Provider of direct-to-

consumer teeth aligners.

Personal Care

ProductsPersonal Goods Consumer Goods 9/12/2019 $1,346.35

Nasdaq:

SDC

Peloton

Interactive Inc.New York, NY

Provider of interactive

stationary exercise

bicycles.

Sports/Leisure

GoodsPersonal Goods Consumer Goods 9/26/2019 $1,160.00

Nasdaq:

PTON

Datadog Inc. New York, NYProvider of a monitoring

and analytics platform.

Network/Systems

Management

Software

SoftwareInformation

Technology9/19/2019 $648.00

Nasdaq:

DDOG

Cloudflare Inc.San Francisco,

CA

Provider of web security

and performance

solutions.

Network/Systems

Management

Software

SoftwareInformation

Technology9/13/2019 $525.00

NYSE:

NET

10X Genomics

Inc.Pleasanton, CA

Provider of integrated

solutions for RNA and

DNA analysis.

Drug Development

TechnologiesBiopharmaceuticals Healthcare 9/12/2019 $390.00

Nasdaq:

TXG


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, fundraising, 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 institutional equity investments in early stage, innovative companies and do not include companies receiving

funding solely from corporate, individual, and/or government investors. Figures contained throughout the report are current at the time of publication

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.

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