As the year quickly comes to an end, we wanted to take a look at a few of the top venture-backed tech exits of 2013 as measured by “value creation”. Specifically, we examined the top 15 IPO or M&A exits with a disclosed exit valuation at or over $100M based on their valuation (real or rumored) at time of exit and compared to the amount of financing they’d received prior to exit.
Analyzing value creation or capital efficiency is helpful in understanding Selection Aptitude in our LP-focused Investor Mosaic models. Selection Aptitude measures the ability of investors to source and ultimately select high quality investments and then shepherd them to favorable outcomes.
Below are some high-level trends and data observed among the top 15 U.S.-based tech exits calculated by value creation including the sectors they operate in and their geographies. While the typical 2014 Tech IPO Pipeline company has raised over $100 million in financing, the list below are companies who were judicious in raising financing raising average of $33 million prior to exit.
The top 15 exits by value creation in 2013 saw an aggregate valuation at time of exit of $18.57B and raised total financing of just $471.5M. Cloud-based life sciences software firm Veeva Systems tops the list of venture-backed exits by value creation, netting a valuation of over $4B in its IPO on just $4M of financing from Emergence Capital Partners. The top 3 was rounded by NEA-backed big data analytics firm Tableau Software and U.S. Venture Partners-backed cybersecurity specialist Trusteer (acquired by IBM).
Silicon Valley takes 40% of the exits on the list, while Washington saw two of the exits in Zulily and Tableau. Massachusetts also notched three of the top 15 tech exits by value creation.
Interestingly, the chart below shows that just under a third of the top VC-backed exits by value creation went to companies in the hardware sector including the likes of 3D printing firm MakerBot. There are three investors who invested in or bought private market secondary shares in more than one of the top 15 exits detailed above. They include Norwest Venture Partners (ScaleIO, FireEye) and later-stage investors Meritech Capital Partners (Zulily, Tableau) and JAFCO Ventures (MoPub, FireEye). Another interesting tidbit is that two of the top M&A exits calculated by “value creation” were 2013 acquisitions by Twitter (MoPub, Crashlytics).