Deal activity stays strong on the back of a continued surge in seed venture capital deals. NY hits deal and funding highs. Andreessen Horowitz, 500 Startups and Google Ventures top list as 2013's most active investors.
In 2013, venture capital financing hit $29.2 billion across 3354 deals. Behind the continued surge in early-stage seed venture capital deals, 2013 marked the fifth straight year of record venture capital deal levels. On the funding front, venture capital funding levels increased in each successive quarter in 2013 and hit $8 billion in Q4 2013 across 849 deals – the highest quarterly funding mark since Q2’12 and a sign of potentially growing confidence throughout the venture ecosystem. Compared to 2012 and 2011, 2013 saw venture capital deals rise 3% and 9%. Funding increased 3% from 2012 but did not top 2011’s post-recession high of $30.8 billion.
End of Year Sees Surge of VC Funding
On a monthly basis, venture capital deals in 2013 topped those in 2012 in all but 4 months. October ’13 was the highest month for venture deals over the past year at 317 deals. As with deal levels, October ‘13 was the strongest month for VC funding behind mega tech deals to companies including MongoDB and Pinterest.
2013 was an active year for U.S. venture capital-backed IPOs, topping 2012’s IPO tally by 55%. Momentum in venture-backed M&A faltered, however, with a 5% drop on a year-over-year basis. In particular, the IPO market for healthcare companies caught fire in 2013 as 38 U.S.-based VC-backed healthcare firms went public. On a year-over-year basis, healthcare IPOs jumped a whopping 217%. Venture-backed tech IPO totals failed to gain momentum in 2013, dropping 7% in terms of deals on a YoY basis.
Seed VC Deals Hit Record Levels
Driven by a combination of proliferating micro VCs and mega funds building seed portfolios, seed VC deals took 26% of overall venture capital deal activity in 2013. Overall seed VC dollars deployed hit a four-year high in 2013 and rose 22% and 74% compared to 2012 and 2011 levels. Indeed, 2013 also saw the highest amount of seed VC deals since 2009. Seed VC deal activity in 2013 jumped 11% from 2012 levels and a whopping 173% from 2010.
As companies both large and small place more emphasis on the platform shift to mobile, Q3 2013 saw U.S. mobile VC funding cross the $1B mark for the first time ever. Q4 2013 also saw $1B+ in mobile VC. The beginnings of a trend?
The Rise of New York’s Tech VC Ecosystem
On the back of several notable financings from MongoDB to Quirky, venture capital funding in NY hit a five-year high in 2013 at $2.9 billion. On a year-over-year basis, NY VC funding jumped 49%, while the 396 deals in NY resulted in a 12% YoY increase. Venture capital deal and funding levels hit an eight-quarter high in Q4 2013 as investors deployed nearly $1B to NY-based startups.
Andreessen Horowitz Lets the Bullets Fly in 2013
With a new $1.5 billion fund on the way in 2014, Andreessen Horowitz led all VCs as the most active investor in 2013, jumping from the 3rd spot in 2012. Google Ventures fast-growing seed VC portfolio saw them jump to the 3rd spot from 5th in 2012. 500 Startups continued their torrid pace of investing as well and moved up to the #2 spot.