venture capital report - images.dowjones.com · venture capital report u.s. vc fundraising (2012...

Venture Capital Report

U.S. | 2Q | 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 2Q 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.

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

Venture Fundraising Increases in U.S. during 2Q 2015 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.

FUNDRAISING

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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Amount Raised ($B) $6.62 $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 49 54 59 60 58 66 82 82 87 86 99 70 86

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Venture Capital Report Largest VC Funds Raised in 2Q 2015

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 MulC-‐stage venture capital

Venture Capital Final

InsCtuConal Venture Partners InsCtuConal Venture Partners XV LP $1,400.00 Menlo Park CA Closed Late-‐stage venture

capital


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


GGV Capital GGV Capital Select LP $457.00 Menlo Park CA 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 2Q 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.

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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Amount Raised ($B) $9.66 $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 1030 947 940 926 958 969 1030 975 1038 961 932 926 1034

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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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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Restart 14 11 18 7 7 8 11 8 8 9 7 6 5

Later 308 287 280 262 285 273 278 294 357 286 312 313 358

Second 183 147 161 147 202 204 212 191 224 198 188 229 234

First 362 330 319 348 310 334 381 328 348 344 337 299 358

Seed 123 123 111 125 122 110 95 107 60 84 51 50 49

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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)

2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Restart $0.16 $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 $5.44 $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 $1.67 $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 $1.99 $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 $0.10 $0.11 $0.09 $0.09 $0.10 $0.10 $0.09 $0.08 $0.07 $0.11 $0.06 $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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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Median Equity Deal Size ($M) $4.50 $3.76 $4.10 $4.00 $4.43 $3.60 $4.26 $4.10 $6.00 $5.00 $6.55 $6.35 $5.73

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30%

2%

24% 4%

20%

2%

18% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

286

39

197 14

195

22

273

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 (2Q 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.

2Q'15 Industry Breakdown By Number of Deals

2Q’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)

Airbnb Inc. San Francisco, CA

Consumer Services Travel and Leisure

Travel Arrangement/

Tourism

Provider of an online marketplace for rental and

short-‐term stay accommodaCons.

6/26/2015 5th $1,500.00

Baillie Gifford & Co. Ltd., China Broadband Capital Partners LP, Fidelity Investments,

General AtlanCc 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 UCliCes

Non-‐Renewable Energy

Oil/Gas ExploraCon and ProducCon

Provider of energy exploraCon 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) soiware

soluCon. 5/1/2015 4th $512.59

Andreessen Horowitz, Comcast Ventures, Fidelity Management & Research Co.*, Founders Fund LLC, Individual Investors, Insight

Venture Partners, InsCtuConal Venture Partners, Khosla Ventures, Sound Ventures,

TPG Growth LLC*

WeWork Companies Inc. New York, NY Business and Financial Services

Financial InsCtuCons 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

InformaCon Technology

Electronics and Computer Hardware

Consumer Electronics

Provider of mobile lifestyle innovaCons.

4/15/2015 Later $300.00 BlackRock Private Equity Partners*

Top 5 Deals into VC-backed Companies (2Q 2015)

FINANCING

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New Enterprise Associates Inc.

Accel Partners Andreessen Horowitz Google Ventures Intel Capital

Most Active Investors for U.S.-based, VC-backed Companies (2Q 2015)

FINANCING

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Amount Raised ($B) in 2Q 2015 by Primary Region

Number of Deals by Primary Region 2Q 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 2Q 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

Number of Deals in 2Q 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


$0.45

$9.29

$0.17

$0.43

$0.27

$2.96

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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 subregion

Subregion Breakout Amount Raised ($B)

Number of Deals by subregion 2Q 2015

Amount Raised ($B) by subregion 2Q 2015

Subregion Breakout Number of Deals

34

342

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28

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141

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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

FINANCING

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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


VALUATIONS

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

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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Median Pre-money Valuation ($M) $18.88 $29.10 $39.51 $19.00 $26.34 $18.16 $22.50 $25.75 $50.25 $35.75 $57.75 $67.14 $65.00

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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 2Q 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.

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

2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 IPOs 12 10 8 9 20 24 20 38 24 22 23 12 27

M&As 127 110 126 103 97 125 135 127 123 135 113 117 86


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

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.

LIQUIDITY

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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Amount Paid ($B) $11.83 $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 127 110 126 103 97 125 135 127 123 135 113 117 86

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Venture Capital Report Top 3 U.S. M&As (2Q 2015)

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

Segment Industry Group Close Date Round Type Amount

Paid ($M) Acquirer

lynda.com Inc. Carpinteria, CA Provider of online learning soluCons. EducaConal/Training Media and Services Media and Content Consumer Services 5/30/2015 AcquisiCon $1,500.00 LinkedIn Corp.

Symphony Teleca Corp. Palo Alto, CA

Provider of technology-‐based outsourcing

services. IT ConsulCng Business Support

Services Business and

Financial Services 4/09/2015 AcquisiCon $780.00 Harman

InternaConal Industries Inc.

Applied PredicCve Technologies Inc. Arlington, VA

Provider of cloud-‐based predicCve analyCcs

soiware.

Business ApplicaCons Soiware Soiware InformaCon

Technology 5/12/2015 AcquisiCon $600.00 MasterCard Inc.

LIQUIDITY

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

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.

LIQUIDITY

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2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Raised ($B) through IPO $7.75 $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 12 10 8 9 20 24 20 38 24 22 23 12 27

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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

Fitbit Inc. San Francisco, CA

Provider of wearable fitness devices and an online health

plamorm.

Consumer Electronics

Electronics and Computer Hardware

InformaCon 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 InformaCon Services Consumer Services 4/16/2015 IPO $266.67

NASDAQ: ETSY

Evolent Health Inc. Arlington, VA

Provider of a soiware plamorm for healthcare

providers to manage a value-‐based care model.

Healthcare AdministraCon

Soiware

Medical Soiware and InformaCon Services Healthcare 6/5/2015 IPO $195.50 NYSE: EVH

Top 3 U.S. IPOs (2Q 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 informaCon, delivering content to consumers and organizaCons around the world across mulCple 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 operaCons globally. It produces leading publicaCons and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulaCon; FacCva, 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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