Wednesday, January 15, 2014

DJX VentureSource US 3Q 2013 - Dow Jones

Highlights for 3Q 2013 include:

- U.S. venture capital raised 11% more funds than the previous quarter and saw the highest number of funds since 4Q’08

- Venture capital investment was at its highest since 2Q 2012

- Median pre-money valuation decreased 7% from 2Q 2013

- Both Initial public offerings (IPOs) and mergers and acquisitions (M&As) experienced an increase from the previous quarter

Venture Fundraising Increases in U.S. during 3Q 2013

62 funds garnered $4.1 billion in 3Q 2013, an 11% increase in number of funds, but a 47% decrease in the amount raised from the prior quarter. Greylock XIV Limited Partnership, the largest U.S. venture capital fund of the year, raised $1 billion, accounting for 25% of the total amount raised in 3Q 2013. Median U.S. fund size was $123 million in the three quarters of 2013.

U.S. Venture Investment on the Rise in 3Q 2013

U.S.-based companies raised $8.1 billion from 806 venture capital deals in 3Q 2013, a 2% increase in capital and a 4% decrease in number of deals from the previous quarter.Compared to the same period in 2012, a 10% decrease was registered in number of deals, while amount raised went up by 4%.

The only sectors that experienced an increase in amount raised were Business and Financial Services (46%) and Consumer Services (1%). Information Technology (IT) saw the largest investment allocation, with 246 deals garnering $2.3 billion and accounting for 28% of total equity investment. Business and Financial Services registered the highest quarter over quarter amount increase (46%), accumulating $2.2 billion through 195 deals. Healthcare placed third with $1.8 billion in 164 deals. The sector reported a 12% decrease in amount raised and a 7% decrease in number of deals. $1.3 billion were raised by Consumer Services in 148 deals, a decrease of 10% in deal flow, while capital invested went up by 1%.

Venture M&A and IPO Market Activity in the U.S. during 3Q 2013

Mergers and acquisitions (M&As) of venture-backed companies increased by 11% from 2Q 2013, with 111 deals garnering $9.7 billion, number of deals also increased 25% compared to the previous quarter, when 89 M&As garnered $8.7 billion.

The largest M&As of the quarter were Aragon Pharmaceuticals Inc., which was acquired by Johnson & Johnson Inc. (NYSE: JNJ), and Trusteer, acquired by International Business Machines Corp. (NYSE:IBM), both for $1 billion.

25 venture-backed companies raised $2.2 billion through public offerings in 3Q 2013. Both number of deals and capital raised increased from the previous quarter, registering respectively a 25% and 24% increase.

The largest IPO of the quarter was FireEye Inc. (NASDAQ: FEYE), which completed a $304 million IPO.

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