Bulge Bracket Bank Investing into Tech Startups Hits Record in 2014

With Goldman Sachs’ involvement in Uber’s newest convertible note fundraising, we analyzed bulge bracket bank investment activity into tech companies. These include equity and debt investments made by the banks. Specifically, we analyzed the following bulge bracket banks: Goldman Sachs, Barclays Capital, Credit Suisse, Deutsche Bank, Bank of America, JPMorgan Chase & Co., Citigroup, Morgan Stanley, and UBS.

Bank investing in tech hits record high

Between 2009 and 2012, bulge bracket banks became increasingly more involved in tech deals. 2012 saw a peak of 46 deals, a 119% increase from 2009, and included investments in Square, Castlight Health, and Spotify. Though there was a dip in 2013, deal activity in 2014 has rebounded and will hit a 6 year high by end of year. In total, bulge bracket banks have been involved in more than 215 deals since 2009.

Goldman Sachs has been the most prominent tech investor among banks

Goldman Sachs has been involved in financing the most tech companies since 2009, investing in more than 80 unique companies. Some prominent deals Goldman Sachs has been a part of include the $1.5B Series E financing of Facebook, the $762M debt round to Vivint and more recently the $400M Series C round to Privia Health. JPMorgan Chase & Co. Citibank and Morgan Stanley saw a similar level of activity but were all significantly behind Goldman in investment activity.

Largest funding rounds with bank investors

Among the largest tech financing deals that included at least one bulge bracket bank as an investor, Facebook tops the list with the $1.5B financing deal that included Goldman. Following after was Flipkart’s $1B financing in 2014 that included Morgan Stanley, and was one of two deals on the list that were in international companies (the other being IHS towers). Goldman makes the most appearances on this list, being involved in all but 2 of the funding rounds on this list.

*These companies had multiple large funding rounds with banks during this time period

Bank investment by series

Most tech deals involving banks happen at the latest stages, either Series E and forward or Growth/Private Equity rounds. Notable examples of this are Lookout (Goldman Sachs and Morgan Stanley), RetailMeNot (JP Morgan Chase & Co.), and iCapital (Credit Suisse). Series A took the second most deal share, including deals in Pindrop Security, Kensho Technologies, and InvestLab. Midstage deals took 30% deal share with nearly 70 deals since 2009.

*Data is until 12/8/2014. Line of credit rounds not included.

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