The last seven years have seen massive investments in tech, which has paid off with a slew of high-profile exits. But how have trends in top VC-backed exits shifted since 2009, when money started pouring back into the tech sector?
We analyzed CB Insights data on the top 100 US VC-backed exits in each of two different time periods — Q1’09 through Q3’12, which saw the IPOs of Facebook, Groupon, and LinkedIn vs. Q4’12 through Q2’16, which saw the Whatsapp acquisition and Twitter’s IPO. We used the data on each 15-quarter period to understand how the most successful tech exits have changed across a number of different metrics, including financings, valuations, and geography.
This analysis serves as a complement to our recent research on the investors in the top 100 US VC-backed tech exits compared across those two different time periods.
Some of the notable trends we found:
- The amount of equity financing that top-performing startups are raising prior to exit is increasing, jumping from a median of $53M between Q1’09 and Q3’12 (period 1) to $91M between Q4’12 and Q2’16 (period 2), for an increase of 72%.
- While funding prior to exit went up, so too did valuations at time of exit. The median valuation of top exits jumped from $500M to $806M between these two periods, an increase of 61%.
- While the total valuation for the combined top 100 exits in period 1 was larger than the combined top 100 exits in period 2, more than half of this was due to Facebook’s $100B+ IPO.
- In both periods, companies took a median of between 6 and 7 years from first funding to exit.
- Despite the drought of tech IPOs recently, the more recent 15-quarter time frame, which ended last quarter, saw more than half of the top exiting companies going public compared to just less than half in the earlier period.
- Enterprise-focused companies accounted for the bulk of top exits in both periods, with enterprise’s lead growing slightly over time. In period 2, the enterprise accounted for 70% of top exits, up from 66% in period 1.
- However, looking at just the top 20 exits in each time period, more than half were consumer-focused companies.
- While California dominated both periods with more than half of the top exits, the states that have seen the next greatest share of top exits have shifted. Texas saw nearly 1/10th of all top exits in period 1, including large exits like HomeAway and SolarWinds, while in period 2 New York took the second place spot.
- Colorado and Illinois broke into the top cities in period 2, with breakouts like Zayo Group, Grubhub Seamless, and DataLogix, while Massachusetts took third place in both time periods, with Endeca Technologies’ exit in period 1 and Wayfair’s exit in period 2.
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