Bubble chatter probably isn’t going away anytime soon it seems. After Q1’14 saw venture capital investment hit its highest quarterly mark since Q2’01, investors deployed 39% more capital across 11% more deals. In aggregate, H1’14 saw U.S. VC funding leap to $23.87B, a 71% increase versus H1’13. The number of U.S. tech companies that raised their first financing at a $1B+ valuation has jumped as well – and represents a 133% increase from the total number of companies that raised at a $1B+ valuation in all of 2013.
While funding numbers have boomed compared to recent quarterly tallies, VC-backed IPO activity was more tame. Of note, 24 U.S.-based VC-backed companies went public in Q2, down from 35 in Q1. In particular, venture-backed tech IPO activity has seen little frothiness. VC-backed M&A ticked up in Q2, rising 7% on a quarterly basis.
New normal? $4B+ invested invested each month in Q2
VCs got extremely busy in Q2, completing 300+ deals in each month of the quarter. With a plethora of mega rounds throughout the quarter, monthly funding levels came in at over $4B per month which is much higher than recent levels.
First half of 2014 is all about the late-stage
Buoyed by mega-deals to familiar startups like AirBnB, Uber, Cloudera and Pinterest, late-stage activity (Series D+) took 45% of all VC funding in H1 2014.
Healthcare again tops tech for VC-backed IPOs in Q2 2014
Over 50% of all quarterly VC-backed IPO activity went to the healthcare sector in Q2’14, the fifth consecutive quarter in which healthcare has topped tech. The biggest U.S.-headquartered IPO in Q2 by valuation at the time of exit was GoPro, backed by investors including Steamboat Ventures and US Venture Partners.
Left coast explosion – California sees $8.93B invested across 442 deals
California VC financing blew up in Q2 as funding and deal levels jumped 55% and 12% on a sequential basis off of multiple nine-figure rounds. Of note, California saw more venture capital deals than the next 15 states combined in Q2’14. San Francisco dominated all California cities in deals and dollars – taking $4.6B in funding across 155 deals.
Boom times for mobile funding
VC funding to the mobile & telecom sector jumped to $2.59B across 146 deals in Q2, topping Q3 2013’s previous high by 132% behind big deals to cos including Uber, Lyft, Instacart and Slack. On a quarterly basis, deals jumped 17%.
The green tech VC comeback?
Green Tech startups saw the highest deal and funding total the sector has received since Q2’12. Compared to the same quarter last year, Q2’14 saw a notable 67% increase in VC funding dollars and a 28% rise in deals with large deals including a $150M late-stage round to SunRun and a $70M growth deal to Sungevity.
NY venture funding tops $1B
Venture capital investors deployed over $1B to NY-based startups in Q2 2014. Coming off a slightly down Q1’14, Q2 funding and deal levels grew 36% and 9% on a sequential basis. Once again, NY tech asserted its dominance over other markets with the Internet and mobile sectors taking almost 9 of every 10 funding dollars in NY in Q2.
