Innovation New Jersey
  • Home
  • Our Coalition
    • Contact Us
  • News
  • Resources
    • State Supports
    • Federal Supports
    • Higher Ed Supports
  • Join Us

Innovation News

Everything Innovation. Everything New Jersey.
Follow us and stay connected.

Venture Capital Investing Exceeds $17 Billion for the First Time Since Q4 2000, According to Report

7/27/2015

0 Comments

 
Washington D.C. - Venture capitalists invested $17.5 billion in 1,189 deals in the second quarter of 2015, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters. Quarterly venture capital (VC) investment increased 30 percent in terms of dollars and 13 percent in the number of deals, compared to the first quarter when $13.5 billion was invested in 1,048 deals. The second quarter is the sixth consecutive quarter of more than $10 billion of venture capital invested in a single quarter.
“In addition to a significant uptick in total investing in Q2, the $7.3 billion invested in Software companies exceeded the total VC dollars invested across all industries in 51 of the last 82 quarters,” remarked Tom Ciccolella, US Venture Capital Leader at PwC. “We saw 26 megadeals (deals $100m or greater) in Q2, including yet another billion dollar investment. After seeing the very first billion dollar VC investment in Q1 of last year, we now count four of the last five quarters with companies receiving billion dollar investments, adding to the ever-growing herd of unicorns which is approaching triple digits. Given the current pace of investing, VC in 2015 is on track to well exceed the $50 billion invested in all of 2014.”

“Driven by a strengthening fundraising environment, the venture ecosystem deployed more capital to the innovation economy in the second quarter than any period in the last fifteen years.  While this uptick can be partly attributed to non-traditional investors joining funding rounds, venture continues to lead the way in deploying capital to the most promising new technologies and companies,” said Bobby Franklin, President and CEO of NVCA.  “With software companies continuing to disrupt entrenched industries and in some cases creating new industries all together, venture investment into the sector increased 30 percent from the first quarter to $7.3 billion, marking the highest total investment into software companies since the inception of the MoneyTree Report in 1995.  As valuations increase and more and more companies choose to stay private longer, we are likely to see software’s share of total venture investment continue to rise.”

Industry Analysis

The Software industry continued to receive the highest level of funding of all industries, increasing 30 percent from the prior quarter to $7.3 billion in Q2 2015. This amount is the largest quarterly investment total going into Software companies since the inception of the MoneyTree Report in Q1 1995. The number of deals also increased to 491, an 11 percent increase compared to the first quarter and the highest quarterly deal count since Q3 2000.

The Media & Entertainment industry was the second largest industry for dollars invested with $2.7 billion going into 118 deals, an increase of 127 percent in dollars and a 34 percent rise in total number of deals. The majority of this increased can be attributed to the largest deal of the quarter falling into the Media & Entertainment industry.

The Biotechnology industry captured the third largest total for dollars invested in Q2 but was second in terms of number of deals with $2.3 billion going into 126 deals, a 32 percent increase in dollars invested but flat in number of deals compared to the prior quarter. This amount is the largest quarterly investment total going into Biotechnology companies since the inception of the MoneyTree Report in Q1 1995. Overall, investments in Q2 in the Life Sciences sector (Biotechnology and Medical Devices combined) accounted for $3.1 billion going into 201 deals, a 41 percent increase in dollars and flat in deals when compared to Q1 2015.

Ten of the 17 MoneyTree industries experienced increases in dollars invested in the second quarter, including Consumer Products & Services (129 percent increase), Media and Entertainment (127 percent increase), Medical Devices & Equipment (71 percent increase), and Financial Services (17 percent increase).

Venture capitalists invested $5.0 billion into 290 Internet-specific companies during the second quarter of 2015. This investment level represents a 64 percent increase in dollars and a 25 percent rise in deals compared to the first quarter of 2015 when $3.1 billion went into 232 companies. “Internet-Specific” is a discrete classification assigned to a company with a business model that is fundamentally dependent on the Internet, regardless of the company’s primary industry category.

Stage of Development

Seed stage investment was up 85 percent in dollars and 81 percent in deals with $169 million invested into 47 deals in the second quarter. Early stage investment was up 58 percent in dollars and 16 percent in deals with $5.8 billion going into 593 deals. Seed/Early stage deals accounted for 54 percent of total deal volume in Q2, compared to 51 percent in the prior quarter. The average Seed stage deal in the second quarter was $3.6 million, up from $3.5 million in the first quarter of 2015. The average Early stage deal was $9.8 million in Q2, up from $7.2 million in the prior quarter.

Expansion stage investment was up 38 percent in dollars and 12 percent in the number of deals in Q2, with $7.3 billion going into 328 deals. Overall, Expansion stage deals accounted for 28 percent of venture deals in Q2. The average Expansion stage deal was $22.5 million, up from $18.2 million in Q1 2015.

Investments in Later stage companies fell 5 percent to $4.2 billion going into 221 deals in the second quarter. Later stage deals accounted for 19 percent of total deal volume in Q2, down slightly from the prior quarter. The average Later stage deal in the second quarter was $18.8 million, down from $20.2 million in the prior quarter.

First-Time Financings

First-time financing (companies receiving venture capital for the first time) dollars increased 43 percent to $2.6 billion in Q2 while the number of deals was up 18 percent from the prior quarter, rising to 373. First-time financings accounted for 15 percent of all dollars and 31 percent of all deals in the second quarter.

Of the companies receiving venture capital funding for the first time in Q2, Software companies captured the largest share and accounted for 38 percent of the dollars and 44 percent of the deals with 163 companies capturing $1.0 billion. This is the largest amount invested in Software companies receiving VC for the first time since Q4 2000. First-time financings in the Life Sciences sector more than doubled from the prior quarter with $858 million going into 44 companies, compared with the same number of companies receiving $412 million in Q1 2015.

The average first-time deal in the second quarter was $7.0 million, up from $5.8 million in the prior quarter. Seed/Early stage companies received the bulk of first-time investments, capturing 55 percent of the dollars and 83 percent of the deals in the second quarter of 2015.

MoneyTree Report results are available online at www.pwcmoneytree.com and www.nvca.org.

Note to the Editor

Information included in this release or related venture capital investment data should be cited in the following way: “The MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters” or “PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters.” After the first reference, subsequent references may refer to PwC/NVCA MoneyTree Report, PwC/NVCA or MoneyTree Report. Charts and tables displaying the data are sourced to “PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters.” After the first reference, subsequent references may refer to PwC/NVCA MoneyTree Report, PwC/NVCA, MoneyTree Report or MoneyTree.

About the PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report

The MoneyTree™ Report measures cash-for-equity investments by the professional venture capital community in private emerging companies in the U.S. It is based on data provided by Thomson Reuters. The survey includes the investment activity of professional venture capital firms with or without a U.S. office, SBICs, venture arms of corporations, institutions, investment banks and similar entities whose primary activity is financial investing. Where there are other participants such as angels, corporations, and governments, in a qualified and verified financing round the entire amount of the round is included. Qualifying transactions include cash investments by these entities either directly or by participation in various forms of private placement. All recipient companies are private, and may have been newly-created or spun-out of existing companies.

The survey excludes debt, buyouts, recapitalizations, secondary purchases, IPOs, investments in public companies such as PIPES (private investments in public entities), investments for which the proceeds are primarily intended for acquisition such as roll-ups, change of ownership, and other forms of private equity that do not involve cash such as services-in-kind and venture leasing.

Investee companies must be domiciled in one of the 50 U.S. states or DC even if substantial portions of their activities are outside the United States.

Data is primarily obtained from a quarterly survey of venture capital practitioners conducted by Thomson Reuters. Information is augmented by other research techniques including other public and private sources. All data is subject to verification with the venture capital firms and/or the investee companies.  Only professional independent venture capital firms, institutional venture capital groups, and recognized corporate venture capital groups are included in venture capital industry rankings.

0 Comments



Leave a Reply.

    Do not miss a single innovative moment and sign up for our newsletter!
    Weekly updates


    Categories

    All
    3D Printing
    Academia
    Acquisitions
    Aerospace
    Agriculture
    AIDS
    Algae
    Alumni
    Animals
    Architecture
    Astrophysics
    Autism
    Awards
    Big Data
    Bioethics
    Biofuel
    Biomedical
    BioNJ
    Bioterrorism
    Bit Coins
    Brain Health
    Business
    Camden
    Cancer
    CCollege
    Cellular
    Centenary
    Chemistry
    ChooseNJ
    Climate Change
    Clinical Trials
    Cloud Tech
    Collaboration
    Computing
    Congress
    Coriell
    Council On Innovation
    Crowdfunding
    Cybersecurity
    DARPA
    Defense
    Degree
    Dementia
    Dental Health
    DOC
    DOD
    DOE
    Drew
    Drones
    Drug Creation
    Einstein's Alley
    Electricity
    Energy
    Engineering
    Entrepreneurship
    Environmental
    FAA
    Fairleigh Dickinson
    FDA
    Federal Budget
    Federal Government
    Federal Labs
    Federal Program
    Finance
    Food Science
    Fort Monmouth
    Fuel Cells
    Funding
    Genome
    Geography
    Geology
    Global Competition
    Google
    Governor Christie
    Grant
    Hackensack
    HackensackUMC
    Healthcare
    Health Care
    HHS
    HINJ
    Hospitals
    Immigration
    Incubator
    Infrastructure
    International
    Internet
    Investor
    IoT
    IP
    IT
    Jobs
    Johnson & Johnson
    K-12
    Kean
    Kessler
    Legislation
    Logistics
    Manufacturing
    Medical Devices
    Med School
    Mental Health
    Mentor
    Microorganisms
    Molecular Biology
    Montclair
    NAS
    Neuroscience
    Newark
    New Jersey
    NIFA
    NIH
    NIST
    NJBDA
    NJBIA
    NJ Chemistry Council
    NJCU
    NJDOLWD
    NJEDA
    NJEDge
    NJHF
    NJII
    NJIT
    NJMEP
    NJPAC
    NJPRO
    NJTC
    Nonprofit
    NSF
    OpEd
    Open Data
    OSHE
    OSTP
    Parasite
    Patents
    Paterson
    Patients
    Perth Amboy
    Pharma
    POTUS
    PPPL
    Princeton
    Prosthetics
    Ranking
    Rare Disease
    R&D Council
    Report
    Resiliency
    Rider
    Robotics
    Rowan
    Rutgers
    SBA
    Seton Hall
    Siemens
    Smart Car
    Smart Cities
    Software
    Solar
    Space
    SSTI
    Startup
    State Government
    STEM
    Stevens
    Stockton
    Subatomic
    Supports
    Sustainability
    Taxes
    TCNJ
    Teachers
    Telecom
    Therapy
    Thermodynamics
    Transportation
    Undergraduate
    USEDA
    Verizon
    Video Game
    Virtual Reality
    Water
    WHO
    William Paterson
    Women In STEM
    Workforce Development

Home   Coalition   News   Resources   Events   Join Us
Picture
Innovation New Jersey Coalition
10 West Lafayette Street
Trenton, NJ 08608-2002
609-858-9507