Q3 2013 sees VC deal count hit highest level since Q3 2001 (dot com boom). Exits also up with another solid quarter for venture-backed IPOs.
Venture capital financing in Q3 2013 gained momentum, as the 857 venture deals completed in the quarter was the largest figure of any quarter since the heady days of the dotcom boom. On the financing front, the $7.2 billion invested represented a third straight quarter of, albeit modest, increased funding by venture investors.
The exit environment for venture-backed companies in Q3 remained strong, as the 23 U.S.-based VC-backed IPOs marked the second consecutive quarter of 20+ VC-backed IPOs and an increase of 130% from the same quarter a year ago. Healthcare IPOs continued their momentum registering 13 in Q3 2013, following the 11 in Q2 2013.
VC-backed IPO valuations on the rise
Overall, there were 135 VC-backed companies that exited in Q3’13 – 23 IPOs and 112 M&As. The 112 M&A exits represented a modest increase from Q1’13 and Q2’13 which logged 103 and 105 M&A exits, respectively. IPO valuations totaled $11.8B – the highest aggregate value of IPO exits in the last five quarters.
Among the five largest VC-backed IPO offerings of the quarter, tech companies took four led by cybersecurity firm FireEye, backed by Norwest Venture Partners and Sequoia Capital.
Mobile sector has best quarter in history
On the back of several large deals (Uber, Kymeta, Flipboard), funding to the mobile sector hit $1.12B marking the first time mobile funding has crossed the $1B threshold in a quarter ever. Deal activity in the mobile sector also hit its highest quarterly mark in history, topping healthcare deal share for the first time.
Mobile gaming takes just 2% of funding to the mobile sector
Candy Crush Saga maker King may be gearing up for an IPO, but VCs are shying away from the mobile gaming industry. Mobile gaming companies saw just 2% of funding to the mobile sector in Q3.
Has NY finally overtaken Mass on deals and dollars?
New York has topped Massachusetts in overall share of VC dollars in two of the past three quarters. And NY has eclipsed Mass for deals for each of the past three quarters.
New York beats back the Series A Crunch
New York startups didn’t have to worry about a crunch in Q3. Both funding and deal share at the Series A stage hit five-quarter highs in Q3. On a sequential basis, NY’s Series A funding share jumped from 17% to a notable 43%, more than the combined funding of NY’s Series B and Series C deals.
The golden age of Silicon Valley financing
Silicon Valley’s share of funding compared to SoCal rose to a five-quarter high with the Valley now taking more than 8 out of 10 VC dollars to Cali companies.
Ring the alarm – clean tech VC implodes
It’s hard to put lipstick on this situation. Back in Q1’10, venture investments in Clean Tech hit $1.3B. Now the sector is a shell of what it used to be with Clean Tech deal and funding falling to multi-year lows registering only $321 million of investment across 33 deals.
The entire report breaks down the financing and exit numbers by geography, stage and industry.