Venture Capital Report

[Pages:21]Venture Capital Report

U.S. | 3Q | 2018

VENTURE CAPITAL REPORT

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 3Q 2018 include: ? U.S. venture capital fundraising decreased during 3Q 2018, both in terms of funds raised and number of closings, but the level of activity is still

considerable when compared with the same quarter last year. ? Venture capital investment in U.S. companies hit an all-time record, eclipsing the dot-com bubble peak by 17%. ? Both the number of IPOs and M&A deal values decreased compared to the previous quarter.

VENTURE CAPITAL REPORT 2

VENTURE FUNDRAISING DECREASES IN U.S. DURING 3Q 2018

FUNDRAISING

148 venture capital funds collected $12.81 billion in 3Q

200

2018, which represents a 27% decrease in the amount

raised from the prior quarter and a 9% drop in the number

160

of funds.

Insight Venture Partners X LP, a venture capital fund that

120

closed at $6.3 billion, was the largest of 3Q 2018, raising

$2.69 billion in its final closing, which accounted for 21% of

80

the total VC financing raised during the quarter.

40

U.S. VC Fundraising (2015?2018) Based on multiple closings

$20.00 $16.00 $12.00 $8.00 $4.00

0

$-

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Amount Raised ($B) $5.76 $9.15 $14.35 $11.91 $8.79 $9.58 $8.20 $14.38 $9.85 $5.65 $9.00 $17.61 $12.81

Number of Funds 78 104 131 119 117 149 174 160 120 142 148 162 148

VENTURE CAPITAL REPORT 3

LARGEST VC FUND CLOSINGS IN 3Q 2018

FUNDRAISING

Firm Name

Fund Name

Amount ($M)

City

Insight Venture Partners

Insight Venture Partners X LP

$2,689.79

New York

Lightspeed Venture Partners

Lightspeed Venture Partners Select III LP

$1,050.00

Menlo Park

Foundry Group LLC

Foundry Group Next 2018 LP

$750.00

Boulder

Lead Edge Capital Management LLC

Lead Edge Capital IV LP $520.00

New York

Ribbit Capital LP

Ribbit Capital V LP

$420.00

Palo Alto

State

Offering Status

Fund Type

Fund Category

NY

Closed

Multi-stage venture capital

Venture Capital

CA

Closed

Late-stage venture capital

Venture Capital

CO

Closed

Multi-stage venture capital

Venture Capital

NY

Closed

Multi-stage venture capital

Venture Capital

CA

Closed

Early-stage venture capital

Venture Capital

Closing Type Final Final Final Final Final

VENTURE CAPITAL REPORT 4

U.S. EQUITY INVESTMENT HITS ALL-TIME RECORD

FINANCING

Equity Financings in U.S.- Based, VC-Backed Companies (2015?2018)

Investment in U.S. companies surged 14% in 3Q 2018 from $35.00

1600

the previous quarter, hitting a new record for the second

consecutive quarter. Total funding now exceeds the peak $30.00

1400

of the first dot-com bubble (1Q 2000) by 17%, although the $25.00

1200

number of deals is 26% lower compared to that era. Deal

1000

volume also fell on a quarter-over-quarter basis, dropping $20.00

8%. Median deal sizes actually decreased 14% from 2Q,

800

indicating that the jump in total funding was concentrated $15.00

600

in a handful of extremely large rounds. When compared to $10.00

last quarter, financing rose most noticeably in the

400

Business & Financial Services, Consumer Goods, and $5.00

200

Consumer Services sectors; IT and Healthcare fell slightly.

$0.00

0

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Amount Raised ($B) $23.18 $23.78 $16.33 $19.34 $19.62 $14.20 $19.49 $21.48 $23.59 $21.87 $26.87 $27.61 $31.53

Number of Deals 1308 1376 1289 1293 1349 1206 1396 1433 1376 1293 1476 1498 1377

VENTURE CAPITAL REPORT 5

EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015?2018)

FINANCING

Number of Deals

500

450

400

350

300

250

200

150

100

50

0 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Seed

108 133 117

89 120 107 145 165 150 147 147 181 155

First

384 385 348 361 366 333 337 342 274 266 315 361 282

Second 217 234 225 233 209 189 219 201 223 179 228 221 198

Later 429 432 422 415 453 379 442 402 419 406 473 438 424

Restart 3

2

4

4

3

1

6

1

4

0

2

0

4

VENTURE CAPITAL REPORT 6

EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015?2018)

FINANCING

Amount Raised ($B)

$18,000.00

$16,000.00

$14,000.00

$12,000.00

$10,000.00

$8,000.00

$6,000.00

$4,000.00

$2,000.00

$0.00 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Seed $126.79 $177.54 $193.61 $154.44 $163.40 $202.78 $268.47 $417.22 $347.13 $396.55 $426.15 $525.26 $488.11

First $2,855.0$3,054.1 $2,201.9 $2,367.4 $3,179.11$2,168.8 $3,447.9$3,234.8$2,263.9$3,521.9 $4,237.9$3,686.2$4,033.3

Second $3,2713.7 $3,2153.1$2,2033.9 $2,7510.1 $2,445.1$2,0453.2$4,1702.8 $3,0797.3$3,6476.5 $3,1532.0$4,8568.6$3,6315.6 $5,2988.2

Later

$14,5938.

$160,174.

$105,158.

$9,5875.3$11,6646.1

$7,7072.1

$108,083.

$12,3670.

4 $14,512.1

$12,3788.

$14,6859.

$16,5959.

$16,9886.

4

8

8

6

6

9

2

2

8

3

3

Restart $55.49 $16.20 $61.84 $41.80 $543.60 $11.00 $82.85 $11.00 $40.58 $0.00 $29.60 $0.00 $35.10

VENTURE CAPITAL REPORT 7

EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE (2015?2018)

FINANCING

Median Equity Deal Size ($M)

$8.00

$7.00

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$0.00 Median Equity Deal Size ($M)

3Q'15 $5.00

4Q'15 $5.00

1Q'16 $4.40

2Q'16 $4.21

3Q'16 $4.50

4Q'16 1Q'17 $4.70 $5.00

2Q'17 $5.22

3Q'17 $5.03

4Q'17 1Q'18 $5.76 $6.00

2Q'18 3Q'18 $7.00 $6.00

VENTURE CAPITAL REPORT 8

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