Overall in 2015, New York investor-backed tech companies saw record highs in funding, reaching $7B in equity funding for the year. But the year ended with a whimper: funding dropped 35% in Q4’15 on a quarterly basis. And exits also fared poorly in Q4’15: there were only 8 VC-backed tech exits.
We used CB Insights to analyze New York financing trends, exit activity, and active investors in exited NY-based tech companies.
Deals and dollars
New York-based investor-backed tech companies received more than $1B in funding in 6 of the last 7 quarters. But the 2015 results were largely driven by outstanding quarters in Q2’15 and Q3’15. The spike in Q3’15 is partially attributable to three $100M+ mega-deals, including a $275M Series E in FanDuel, $200M corporate minority in Buzzfeed, and $130M Series D in ZocDoc.
As already noted, funding in Q4’15 dropped 35% quarter-over-quarter from $2.2B in Q3’15 to $1.4B in funding in Q4’15. Q4’15 also saw the second lowest deal total since Q2’14 with 207 deals completed. Additionally, Q4’15 had less deals when compared to the same quarter a year prior which saw 214 deals in Q4’14.
Quarterly exits
New York tech exit activity trended sharply downwards through Q4’15, with just 8 VC-backed exits realized, the lowest total for quarterly exits since at least Q1’11. Q4’15 exits are down almost half when compared to Q3’15, which had 15 exits.
There was just one tech IPO in New York in 2015 (Etsy‘s IPO early in the year), compared to 4 IPOs in 2014.
Top VCs in exited tech companies
Lerer Hippeau Ventures and BoxGroup top our list as the VC investor in the most exited tech companies based in New York in 2015. Both were investors in popular calendar startup Sunrise, which was bought by Microsoft for $100M. SV Angel was third on our list of VC investors in exited NY-based tech companies. See the rest of the list below.
| Rank | Investor |
|---|---|
| 1 | Lerer Hippeau Ventures |
| 1 | BoxGroup |
| 3 | SV Angel |
| 4 | RRE Ventures |
| 5 | FirstMark Capital |
| 5 | ENIAC Ventures |
| 5 | Founder Collective |
| 5 | First Round Capital |
| 5 | Great Oaks Venture Capital |
Largest exits
There has been at least one New York-based, VC-backed tech exit at a $1B+ valuation in each of the past three years. However, with prominent New York startups Gilt Groupe and several others recently exiting for fractions of their valuations, its unclear if this at least $1B+ exit/per year trend will continue.
7 of the top 10 New York tech companies exited for $500M+, check it out below.
| Rank | Company | Acquirer | Year | Valuation ($M) |
|---|---|---|---|---|
| 1 | Etsy | IPO | 2015 | $1,775 |
| 2 | OnDeck Capital | IPO | 2014 | $1,323 |
| 3 | Tumblr | Yahoo | 2013 | $1,100 |
| 4 | Buddy Media | Salesforce | 2012 | $745 |
| 5 | Shutterstock | IPO | 2012 | $570 |
| 6 | Varonis Systems | IPO | 2014 | $524 |
| 7 | 1010data | Advance Publications | 2015 | $500 |
| 8 | Tremor Video | IPO | 2013 | $494 |
| 9 | Borderfree | IPO | 2014 | $488 |
| 10 | The Business Insider | Axel Springer | 2015 | $442 |
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