CB Insights

The U.S. Venture Capital Year in Review - 2014

Venture capital funding hits highest total since 2001.
$47.3 billion invested across 3,617 deals.

Venture capital funding hit its highest annual mark since 2001 as venture investors participated in $47.3 billion across 3,617 deals. Even versus 2013, the past year was huge as venture capital skyrocketed 62% YoY due to multiple $500M+ mega-rounds while deal growth was more modest, climbing 8%. Of note, two quarters each – Q2’14 and Q4’14 – notched over $13B in funding.

This in-depth report analyzes financing and exit trends across U.S.-based rounds in which VCs participated as well as top investors, exits and deals in 2014. Below is a high-level summary of some of the report’s highlights. For all of the findings, download the entire report. It’s free.

2014: $47.3 billion invested in 3,617 deals

Quarterly VC Investment & Deal Volume Trend (2014)

A mix of traditional VC money coupled with corporate VCs, hedge funds, private equity investors and even sovereign wealth funds created a potent cocktail in 2014 lifting funding levels to the highs seen during the dot com boom. 2014 ended with a bang on the funding front as VC-backed deals hit $7.1B in the final month of the year. The massive funding figure was largely driven by mega tech deals to companies including Uber and Snapchat.

Venture-backed healthcare IPOs continue dominance

Venture Capital IPOs by sector (2014)

Although there were 738 VC-backed exits in 2014, the IPO picture was a bit mixed. The healthcare IPO market continued its momentum from 2013 with 64 US-companies going public in 2014, up 68% YoY. Venture-backed tech IPO activity stalled a bit after Alibaba’s IPO in September but did finish up versus 2013 and closed out with a strong December.

California and Mass took 62% of the U.S.-headquartered venture-backed IPOs in 2014. California saw a whopping 45% jump in venture-backed IPOs on aYoY basis. New York grew its # of IPOs significantly versus 2013 but remains a distant 3rd to Massachusetts.

New Enterprise Associates: 2014’s most active VC firm

As it targets a new $2.5B fund, New Enterprise Associates topped all venture investors by unique company deals in 2014. Andreessen Horowitz, which ranked 1st by deal count in 2013, again ranked in the top 2, followed by fellow mega-fund Kleiner Perkins Caufield & Byers.

A list of the top 20 most active venture capital investors in 2014 by unique company deals is below. To see an appendix of the top 100 most active VC investors in 2014, download the full report.

  • New Enterprise Associates

  • Andreessen Horowitz

  • Kleiner Perkins Caufield & Byers

  • Google Ventures

  • Khosla Ventures

  • SV Angel

  • 500 Startups

  • Sequoia Capital

  • First Round Capital

  • General Catalyst Partners

  • Atlas Venture

  • Accel Partners

  • Intel Capital

  • Foundry Group

  • Lerer Hippeau Ventures

  • Bessemer Venture Partners

  • True Ventures

  • Lightspeed Venture partners

  • Greylock Partners

  • Redpoint Ventures

Mobile funding hits record $7.8B

Mobile VC Investment and Deal Volume Trend (2014)

In Q4’14, VC funding to the mobile sector topped $3B for the first time ever due to mega-financings to Uber, Snapchat, Instacart, and Square. Overall VC funding to the mobile sector was up 109% versus 2013 driven by these mega-deals. Deal volume was up only 10%. The Uber impact was clear in the mobile numbers.

Mobile Deal Share by Round Type (2014) Mobile Dollar Share by Round Type (2014)

Early stage investments at the Seed and Series A stage made up 70% of VC deals in the mobile sector as investors increasingly bet on the promise of mobile. But late-stage mega-deals saw 58% of funding going to Series D+ stages.

2014 Seed VC funding jumps to high

With both micro VCs and multi-stage funds heavily active at the seed-stage, 2014 saw the highest number of seed VC deals since 2009 with 976 financings. 4 of the 5 most active quarters for seed deals since 2011 occurred in 2014.

Seed Venture Capital Funding and Deal Trend (2014)

Overall, seed VC funding hit a five-year high in 2014 at $1.33B as funding has increased in four straight quarters and was up 49% in 2014 versus 2013, hitting a quarterly high of $390M in Q4’14.

New York tech has breakout year

Share of NY VC Deals by Sector

Venture capital funding levels broke out in NY in 2014 with every quarter clocking in above $1B in total funding. NY VC funding was up 53% YoY while deals grew at a more modest 7% YoY.

63% of deals in New York went to Internet firms in 2014. Mobile saw an increased deal share for the second straight year at 19%, coming in at a solid #2 to Internet in NY.

The 2014 U.S. Venture Capital Year in Review Report highlights financing and exit trends as well as top investors, exits and deals in 2014.

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