A surge in $100 million mega-financings resulted in a big funding year for internet startups.
Venture capital investment into Internet companies reached $19.6B in 2014, up 67% versus 2013. The rise in funding levels was driven by an increasing number of mega-financings to a small but growing group of internet startup high-fliers. As a result, deal activity ticked up just modestly as 1675 total deals were closed in 2014, up 7% YoY. Funding levels peaked in Q2’14 at $5.6B behind mega-deals to AirBnB, Pinterest, and Automattic which totaled over $800 million.
Top Internet Deals Raise Nearly $4B
The surge in funding in 2014 was driven by multiple nine-figure VC-backed financings to Internet companies including Cloudera’s cumulative $900M Series F, AirBnB’s $475M Series D, and SurveyMonkey’s $250M financing. Overall there were more than 20 nine-figure deals to Internet companies in 2014 which in total represented over $3.9B.
The top 10 deals below.
New York Deal Share Doubles Mass in 2014
California continued to dominate the overall Internet industry in terms of deals with 46% of all deals going to the Golden State. New York held its ground for the second straight year with a 16% deal share, more than double the share of rival tech hub Massachusetts, and over 5x as many deals as any other state. Vice Media’s $250M growth equity financing as well as Flatiron Health’s $130M Series B which featured Google Ventures and First Round Capital were the two largest deals to NY Internet companies.
BI Captures 10% of Internet VC Dollars
Business Intelligence companies continued to dominate both the deal and dollar share for Internet subindustries, taking 10% share of each. Three BI companies raised $100M+ rounds in 2014 including Qualtrics ($150M), Domo Technologies ($125M), and Anaplan ($100M). Ad, Sales & Marketing, CRM, and Monitoring and Security companies all saw half the amount of VC dollars in 2014 with a 5% dollar share. Overall funding remains fairly diverse across all subindustries as evidenced by the large contingent of “Other” investments which is nearly 40 other sub-industries which each had less than 2% share.
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