Europe | 3Q | 2015 VENTURE CAPITAL REPORT

Venture Capital Repor

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 3Q 2015 include:

• •  European venture capital fundraising falls from prior quarter;
  
• •  Venture capital investment into European companies improves in consecutive quarters;
  
• •  The number of initial public offerings (IPOs) experienced a decrease from the prior quarter, while the number of mergers and acquisitions (M&As) are on the rise.
  

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FUNDRAISING 

13 European venture capital funds accumulated
€853 million during 3Q 2015, dropping 58% in capital raised from 2Q 2015 with a 52% decrease in the number of fund closings.
• Compared with the year ago period, euros raised improved by 5%, despite a reduction in the number of
fund closing (from 20 to 13).

• The largest fund of the quarter was Lakestar II LP, which raised  €350 million, accounting for 41% of the total amount for 3Q 2015.

FINANCING
European companies raised over €3 billion for 355 deals during 3Q 2015, a minimal increase in the amount raised from 2Q 2015 despite a 5% slide in the number of deals completed.

• •  In contrast with the year ago period, both investment and number of completed deals improved, respectively
  by 31% and 1%.
  
• •  Consumer Services (€935 million) was the strongest sector of the quarter in terms of attracting investment followed by Healthcare (€929 million).
  

FINANCING 

Consumer Services received the largest allocation of investment during 3Q 2015 (31%), accumulating €935 million through 103 deals. Deal flow rose by 5% from the prior quarter, despite a 33% drop in capital invested.
Healthcare placed second in terms of equity financing raising €929 million across 62 deals, an improvement of 101% in capital raised and 13% in deals completed from the previous quarter.
Business and Financial services placed third, with companies in the sector gathering 25% of the total amount invested for the quarter. The sector received €746 million across 112 deals; a rise of 12% in capital invested and of 8% in deal flow from 2Q 2015.

FINANCING

The United Kingdom was the most favoured destination for equity financing during 3Q 2015, receiving €947 million across 87 deals. The country took 31% of all equity financing for the quarter, despite a 9% decrease in deal flow from 2Q 2015.

France placed second, attracting a 19% share of European financing. Investment reached a total €567 million, a 29% rise in capital invested, despite a 22% drop in number of deals. 

Germany occupies third position raising €428 million, 14% of the total for the quarter. 

Switzerland placed fourth with a 6% share, raising €194 million during

LIQUIDITY 

43 venture-backed M&As took place in Europe during 3Q 2015, a 2% increase from 2Q 2015 but a 12% drop from 3Q 2014.
A total of €2.7 billion were raised through VC-backed M&As in 3Q 2015, a decrease of 27% from the previous quarter and a 9% drop compared to 3Q 2014.
8 venture-backed IPOs took place during 3Q 2015, a 47% decrease from the prior quarter and a 50% decrease in listings for VC-backed companies from the year ago period.

LIQUIDITY 

8 venture-backed IPOs took place during 3Q 2015, a decrease in number of deals both to the prior quarter and the previous year.

• •  IPOs raised almost €700 million during 3Q 2015, an increase of 31% from the €533 million raised in 2Q 2015. VC-backed companies also raised an higher amount through IPOs when compared with the year ago period (€447 million).
  
• •  The largest European VC-backed IPO of 3Q 2015
  was the Flow Traders listing in July. The company raised €521 million for its offering on the Amsterdam Exchange Index.
  

Berkery Noyes Information Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Information Industry.

The Information report features companies in the Media & Marketing, Software, and Online & Mobile Industries. It analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.

Total transaction volume rose five percent since second half 2014. Aggregate value was nearly flat at $112.63 billion. Of note, the peak for volume throughout the past two-and-a-half years occurred in first half 2015, whereas value reached its zenith in first half 2014. In terms of valuations, the median revenue and median EBITDA multiple over the past six months remained about constant at 2.3x and 11.6x, respectively. The industry’s largest transaction in first half 2015 was Permira and CPP Investment Board’s acquisition of Informatica, a provider of enterprise data integration software and services, for $4.77 billion.

Regarding the three horizontal markets covered in the report, the number of transactions in the Software horizontal experienced a three percent uptick. As for software used within specific vertical industries or “Niche Software,” volume increased 11 percent. Four of the horizontal’s top ten highest value deals year-to-date were located in the Niche segment. Two of these four acquisitions took place in the Capital Markets sector.

Deal volume in the Infrastructure Software segment stayed about the same during the half year period. This followed a 32 percent increase in second half 2014. Three of the horizontal’s top five largest deals in first half 2015 were completed in the segment, two of which occurred in the cyber-security subsector.

In the Online & Mobile horizontal market, transaction volume improved 12 over the last three months. The SaaS & Cloud segment underwent a 16 percent rise in volume, which was the most active period for SaaS & Cloud on a half year basis throughout the past two-and-a-half years. Meanwhile, SaaS & Cloud deals in first half 2015 received a median revenue multiple of 3.5x, compared to 2.3x for the entire Online & Mobile market.

M&A volume in the consumer application subsector increased 12 percent, from 119 to 133 transactions. Notable mobile-based deals in first half 2015 included clothing manufacturer Under Armour’s acquisition of MyFitnessPal, a digital health mobile application focused on nutrition, for $474 million; Ola’s acquisition of TaxiforSure, a taxi rental aggregator, for $200 million; and Dropbox’s acquisition of CloudOn, which allows users to create and edit documents on mobile devices, for $100 million.

Deal flow in the overall Media and Marketing horizontal increased two percent over the past six months. The horizontal’s largest transaction in first half 2015 was Verizon Communications’ acquisition of AOL for $4.13 billion in the Internet Media segment. Internet Media volume also saw a 25 percent rise, from 208 to 259 deals. In addition to AOL, notable segment deals during first half 2015 included Houghton Mifflin’s acquisition of Scholastic Corporation’s Education and Technology Services business for $575 million; CoStar Group’s acquisition of Apartment Finder, a rental listing marketplace, for $170 million; and Facebook’s acquisition of TheFind, a personalized shopping engine, as the social network looks to bolster its digital advertising business.

Marketing transaction volume underwent a four percent increase in first half 2015. In addition, deals in the digital marketing subsector represented 45 percent of the segment’s overall activity in first half 2015. Japanese advertising company Dentsu was the overall industry’s most active acquirer with nine transactions year-to-date.

“Drawn by strong valuations, once reticent sellers are showing increased receptivity to good offers,” said James Berkery, Chief Information Officer at Berkery Noyes. “Acquirers are motivated by the need to find new growth avenues and are mindful of those nimble, entrepreneurial upstarts nibbling at the edges of their markets.” Berkery continued, “Meanwhile, companies of every stripe are finding ways to package content with the tools and technology that make it easier to access, manipulate, analyze, and distribute information. Most of those who succeed in the solutions business, as the content-plus-tools convergence is often called, do so by acquiring, rather than building, the components they do not own.”

Berkery Noyes Healthcare/Pharma Information and Technology Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.

The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.

Total deal volume increased 16 percent relative to second half 2014. Transactions completed by strategic acquirers rose from 138 to 163 deals, whereas those backed by financial sponsors improved from 52 to 57 deals. Aggregate value fell 43 percent, from $10.70 billion to $6.06 billion. However, value gained 24 percent on a year-over-year basis. Also of note, seven of the industry’s top ten largest deals last year occurred in second 2014.

The peak for volume throughout the previous two-and-a-half years occurred in first half 2015 while value reached its zenith in second half 2014. In terms of valuations, the median revenue multiple over the past six months decreased from 3.0x to 2.7x, which remained slightly above its median throughout the last 30 months.

The industry’s largest transaction year-to-date was MEDNAX’s acquisition of vRad, an outsourced radiology physician services and telemedicine company, for $500 million. This occurred in the Healthcare Business Services segment. Meanwhile, M&A activity in the segment increased 53 percent, from 34 to 52 deals.

Transaction volume in the Healthcare IT segment remained about constant, with a total of 101 deals. This represented a 29 percent increase compared to first half 2014 and was the segment’s highest point throughout the past two-and-a-half years. Moreover, there was a 16 percent rise in the number of strategic acquisitions in the Healthcare IT segment, from 69 in second half 2014 to 80 deals in first half 2015. Strategic acquirers accounted for 79 percent of Healthcare IT volume year-to-date.

The Consumer Health segment saw a slight uptick, from 14 to 16 deals. Clothing manufacturer Under Armour was a notable Consumer Health acquirer with two mobile-based acquisitions in first half 2015 relating to digital health data, nutrition information, and fitness tracking. Along these lines, Under Armour acquired MyFitnessPal for $475 million and Endomondo for $85 million. These two transactions will build upon Under Armour’s previous acquisition of MapMyFitness for $150 million in 2013.

As for other markets covered in the report, volume in the Medical Education segment more than doubled, from 9 to 20 deals. Transaction volume in the combined Pharma IT, Pharma Business Services, and Pharma Information stayed nearly the same, from 23 to 25 deals. One of the largest related transactions in first half 2015 was ICON’s acquisition of MediMedia Pharma Solutions, a provider of scientific analysis, assessment, research and insights for the biopharmaceutical and medical device industries, for $120 million.

“In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are healthcare information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.”

O’Connor continued, “Interestingly, strategic buyers are dominating the deal flow and high multiples. However, financial buyers remain on the hunt, are focused on high growth assets, and have over $500 billion of dry powder which they can leverage 4x-8x. We haven’t seen such a seller’s market since the 2004-2007 timeframe. With all the attractive dynamics noted above there remains a lack of quality assets of scale available, so any attractive assets are commanding high valuations and multiple buyers.”

“The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, shifting responsibilities between payors and providers, and in increased regulatory environment,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enable healthcare IT companies that effectively address market niches and have some level of scale are in high demand by both financial and strategic buyers.”

Berkery Noyes: Financial Technology and Information Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Financial Technology and Information Industry.

The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Total transaction volume decreased seven percent in first half 2015. Aggregate deal value increased 17 percent, from $16.21 billion to $18.90 billion. When compared to first half 2014, volume rose 14 percent and value gained 63 percent. The peak for volume throughout the last 30 months occurred in second half 2014 while value reached its zenith in first half 2015.

The median revenue multiple increased from 2.8x in second half 2014 to 4.5x in first half 2015. Of note, deals during the last two-and-a-half years with enterprise values above $160 million received a median revenue multiple of 4.5x and median EBITDA multiple of 16.2x, whereas those in the $10-$20 million range had a median revenue multiple of 1.7x and median EBITDA multiple of 9.0x.

The segment with the largest increase in volume during first half 2015 was Capital Markets with a 31 percent rise, from 58 to 76 deals. Four of the top ten deals also occurred in the Capital Markets segment. Notable related transactions included SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management software, for $2.6 billion; Playtech’s acquisition of Plus500, an online FOREX trading platform that serves retail customers, for $697 million; BATS Global Markets’ acquisition of KCG Hotspot FX, a FOREX trading venue and electronic communication network, for $365 million; and Bridgepoint’s acquisition eFront SA, which offers software solutions focused on alternative investments and risk management, for $327 million.

“An increased appetite for technology spending at financial institutions is presenting vendors with good pipelines and an increased array of legacy tech sellers,” stated Peter Ognibene, Managing Director at Berkery Noyes. “In addition, regulatory pressures are requiring more transparency pertaining to risk assessment and valuation methods.”

Meanwhile, the number of transactions in the Banking segment remained about constant on a half year basis. Notable Banking deals in first half 2015 included Bottomline Technologies’ acquisition of Intellinx, a provider of cyber fraud and risk management solutions, for $67 million; and Temenos Group’s acquisition of Akcelerant Holdings, which offers origination, account servicing, collection, and risk management software, for $50 million. As for the Insurance segment, transaction volume rose 15 percent, from 26 to 30 deals.

The overall industry’s decrease in volume over the past six months was attributable in major part to a 41 percent decline in the Payments segment. This came in the aftermath of a 46 percent increase in second half 2014, which was the segment’s highest point over the past two-and-a-half years. In terms of value, six of the industry’s top ten largest deals year-to-date were Payments related. Three of these six transactions reached the $1 billion threshold. This consisted of a private equity consortium’s acquisition of ICBPI, an Italian payments and clearing services company, for $2.5 billion; Optimal Payments’ acquisition of Skrill Group, a digital payments business, for $1.7 billion; and Davis + Henderson’s acquisition of FundTech, a payments and transaction banking software company, for $1.3 billion.

“The payments sector had many license-and-maintenance legacy business models, which are good, but not always the most attractive to buyers,” said John Guzzo, Managing Director at Berkery Noyes. “Today, companies prefer subscription based business models. Moreover, as companies continue to pursue electronic bill payment and online payments to eliminate paper bills, the payments industry may see more mergers in that space in the future.” Guzzo continued, “Data analytics represent another attractive and growing field in payments for buyers as they seek to harness vital customer and transaction data and repackage it for marketing and sales purposes. Payments companies want to offer more intelligence to their customers.”

Berkery Noyes: Media and Marketing Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.

Deal volume saw a three percent uptick on a half year basis, from 841 to 863 transactions. Total value fell 31 percent, from $52.72 billion to $36.48 billion. This analysis excludes the proposed mega-merger of Time Warner and Charter Communications, which falls outside the report’s purview. 11 of the industry’s top ten highest value deals in second half 2014 reached the $1 billion threshold, as opposed to five in first half 2015. The median revenue multiple over the past six months decreased from 2.1x to 1.9x, while the median EBITDA multiple declined from 12.0x to 8.7x.

The highest value deal in first half 2015 was Verizon Communications’ acquisition of AOL for $4.13 billion in the Internet Media segment. Internet Media also had the largest half year increase in volume, rising 25 percent.

Regarding specific Internet Media subsectors, there was a 36 percent rise in the online classifieds marketplace, from 47 to 64 acquisitions. One of the largest related deals thus far in 2015 was CoStar Group’s acquisition of Apartment Finder for $170 million.

Marketing transaction volume underwent a four percent increase in first half 2015. In addition, deals in the digital marketing subsector represented 45 percent of the segment’s overall activity in first half 2015. Japanese advertising company Dentsu was the overall industry’s most active acquirer with nine transactions year-to-date.

High profile Marketing deals in first half 2015 included GTCR and Adams Outdoor Advertising’s acquisition of Fairway Outdoor Advertising for $575 million; Red Ventures’ acquisition of Pitney Bowes’ marketing services business, Imagitas, for $310 million; and Solera Holdings’ acquisition of DMEautomotive, a provider of marketing solutions for the retail automotive industry, for $143 million.

As for other sectors covered in the report, deal flow in the Consumer Publishing segment remained about constant. The segment’s highest value transaction in first half 2015 was Capmark Financial Group’s acquisition of Orchard Brands, a multi-brand family of 13 catalog and eCommerce brands that that serve the boomer and senior demographics, for $410 million.

Other notable Consumer Publishing deals included New Media Investment Group’s acquisition of Stephens Media for $103 million and The Columbus Dispatch for $47 million; and Tribune Publishing’s acquisition of MLIM, the owner of the San Diego Union-Tribune, for $85 million. Another high profile consumer focused deal that spanned several segments was Sequential Brands Group’s acquisition of Martha Stewart Living Omnimedia, a diversified media and merchandising company, for $300 million.

The number of acquisitions in the B2B Publishing and Information segment fell 17 percent in first half 2015. This followed a 16 percent increase in second half 2014, which was the segment’s most active half year period during the past two-and-a-half years. Meanwhile, M&A volume in the Entertainment segment declined ten percent over the last six months. This marked a return to its average level over the preceding three half year periods.

Deal activity in the Exhibitions, Conferences, and Seminars segment saw a twelve percent improvement, from 43 to 48 transactions. This was the segment’s fourth consecutive half year increase and its peak for volume over the last 30 months.

Also of note, private equity backed deals in the segment nearly quintupled between second half 2014 and first half 2015, from four to 19 acquisitions. The segment’s largest transaction in first half 2015 was the acquisition of Cirque du Soleil by an investor group led by TPG Capital for $1.2 billion.

“Many media and marketing companies are looking for acquisitions to enhance their growth,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “They are also making investments in those areas where their clients are spending the most money and where they can sell their services at a premium. M&A activity is robust due to the high stock market valuations and the low cost of financing transactions.”

Berkery Noyes: Software Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Software Industry. The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.

Berkery Noyes’ data showed that transaction volume increased three percent in first half 2015. This was the industry’s fourth consecutive half year rise throughout the last 30 months. Deal value fell nine percent on a half year basis, totaling $55.65 billion year-to-date. Private equity backed deals accounted for 42 percent of the industry’s aggregate value in first half 2015, compared to 35 percent in second half 2014 and 17 percent in first half 2014.

The median revenue multiple declined from 3.0x to 2.8x over the past six months. However, this represented a 17 percent rise compared to first half 2014, when the multiple was 2.4x. Of note, deals in first half 2015 with enterprise values above $160 million received a median revenue multiple of 3.8x and median EBITDA multiple of 25.1x, whereas those in the $10-$20 million range had a median revenue multiple of 2.4x and median EBITDA multiple of 13.4x.

Meanwhile, Microsoft was the most active strategic acquirer in first half 2015 with seven transactions. Microsoft has continued to complete M&A deals to bolster its mobile capabilities, as indicated by the recent acquisitions of Datazen, a mobile business intelligence and data visualization service; and Sunrise Atelier, the developer of a mobile calendar application.

In addition to these mobile-based deals, Microsoft acquired BlueStripe Software, an application management service that provides performance monitoring and troubleshooting solutions; 6Wunderkinder, a cloud-based task management platform; LiveLoop, a developer of collaboration tools for PowerPoint; Revolution Analytics, an open-source analytics firm focused on the statistical programming language R; and Equivio, an e-discovery software company.

As for software used within specific vertical industries or “Niche Software,” transaction volume increased 11 percent. Four of the industry’s top ten highest value deals year-to-date occurred in the segment, two of which were in the Capital Markets subsector.

Deal volume in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a two percent uptick relative to second half 2014. In terms of notable private equity backed deals in the Human Capital Management (HCM) subsector, Vector Capital acquired Saba Software for $270 million and Frontier Capital acquired a majority stake in Electronic Commerce for $40 million.

Elsewhere in the Business segment, PTC, a developer of software and technology solutions for manufacturers, was one acquirer that has been focusing on the Internet of Things (IoT). This included the acquisition of ColdLight Solutions for $105 million in first half 2015, which follows PTC’s acquisition of Axeda Corporation for $170 million in second half 2014 and ThingWorx for $130 million in second half 2013.

Transaction volume in the Infrastructure Software segment remained about constant during the half year period. This followed a 32 percent increase in second half 2014. Three of the industry’s top five largest deals in first half 2015 were completed in the Infrastructure segment. In addition to Informatica, this consisted of Bain Capital’s acquisition of Blue Coat Systems for $2.4 billion and Raytheon Company’s acquisition of Websense for $1.9 billion, both of which were in the cyber-security subsector. Of note, Websense was previously acquired by Vista Equity Partners for $955 million in 2013 and an investor group led by Thoma Bravo previously took Blue Coat private in 2011 for $1.1 billion.

Another cyber-security deal that made the top ten list in first half 2015 was telecommunications operator SingTel’s acquisition of Trustwave, a data security and compliance solutions firm, for $810 million. Cisco’s $635 million acquisition of OpenDNS, a network security company, just missed inclusion in the top ten.

Other high profile Infrastructure transactions year-to-date in different areas of the segment included EMC’s acquisition of Virtustream, a cloud computing management software company, for $1.2 billion; and CA Technologies’ acquisition of Rally Software, a provider of Agile development software and services, for $480 million.

“Acquirers are demanding a broad array of security capabilities that span the gamut of internal and external network and application users,” said James Berkery, Chief Information Officer of Berkery Noyes. “This includes vulnerability and intrusion detection and prevention, identity management, rogue device identification and other areas.” Berkery continued, “There is a need in the marketplace for solutions that support configuration, provisioning, firmware updates, diagnostics and security, particularly as the range of device types expands.”

Berkery Noyes: Online and Mobile Industry M&A Report For Half Year 2015

Berkery Noyes has released its first half 2015 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.

Transaction volume increased 12 percent in first half 2015. Aggregate value rose nine percent, from $64.55 billion to $70.27 billion. The median revenue multiple decreased from 2.6x to 2.3x, while the median EBITDA multiple declined from 13.7x to 10.3x. The peak for both volume and value over the last 30 months occurred in first half 2015.

The most active segment year-to-date was SaaS & Cloud with 406 transactions, which represented a 16 percent increase compared to second half 2014. This was the segment’s highest level of activity on a half year basis during the past two-and-a-half years. Regarding valuations, SaaS & Cloud deals in first half 2015 received a median revenue multiple of 3.5x. The industry’s largest transaction in first half 2015 took place in the segment as well. This consisted of Cox Automotive’s acquisition of Dealertrack Technologies, a provider of web-based software solutions and services for automotive retailers, for $4.36 billion.

In terms of other high value Online and Mobile deals thus far in 2015, Verizon Communications acquired AOL for $4.13 billion. Verizon pursued this acquisition in part to bolster its digital and video advertising capabilities. AOL has been making deals of its own in the programmatic video buying space, such as in first half 2014 with the acquisition of PrecisionDemand, a television ad-targeting company. PrecisionDemand was merged with Adap.tv, the latter of which AOL acquired for $405 million in second half 2013.

Moreover, Comcast also completed a deal in first half 2015 with the acquisition of Visible World, a provider of targeted television advertising solutions. The cable operator was responsible for a related transaction in first half 2014 with the acquisition of FreeWheel, a video ad-serving company utilized by television networks and media companies, for $360 million.

Deal volume in the E-Marketing & Search segment experienced a two percent uptick in first half 2015. High profile deals in the digital marketing subsector included On Assignment’s acquisition of Creative Circle, a staffing agency that serves digital marketing companies, for $570 million; Twitter’s acquisition of TellApart, an ad-tech platform, for $533 million; NetSuite’s acquisition of Bronto Software, an email marketing automation provider for multi-channel retailers, for $200 million; Nielsen’s acquisition of eXelate, a data technology company that facilitates programmatic buying, for $200 million; The Rubicon Project’s acquisition of Chango, a programmatic advertising company, for $122 million; and AppNexus’ acquisition of Yieldex, an online advertising technology firm, for $100 million.

M&A volume in the E-Commerce segment improved ten percent in first half 2015. Five of the industry’s top ten largest acquisitions year-to-date were also E-Commerce related. As for specific E-Commerce subsectors, notable deals in the online food delivery market included Just Eat’s acquisition of Menulog Group for $687 million; Delivery Hero’s acquisition of Yemeksepeti for $589 million; and Yelp’s acquisition of Eat24 for $134 million.

The number of deals in the consumer application subsector increased 12 percent, from 119 to 133. Meanwhile, one of the largest mobile-based payments transactions in first half 2015 was PayPal’s acquisition of mobile wallet platform Paydiant for $280 million in the B2B subsector.

“Currently there is no dominant player in the mobile payments space, but giants like Apple, Google and PayPal are vying for control,” said Peter Ognibene, Managing Director at Berkery Noyes. “It is also important to note that mobile payments alone may not provide a value-added service for consumers. However, companies that can integrate a full range of products with their mobile payments platform provide a compelling reason for both consumers and merchants to adopt the technology.” Ognibene continued, “Another complimentary development in mobile payments landscape, the acceptance of host card emulation (HCE) by MasterCard and Visa, will further facilitate the expansion of mobile payments.”

Berkery Noyes: Healthcare/Pharma Information and Technology Industry M&A Report For Half Year 2015

Berkery Noyes, an independent mid-market investment bank, has released its half year 2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.
http://www.berkerynoyes.com/publication/trends/2015half/healthcare.aspx
The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.

Total deal volume increased 16 percent relative to second half 2014. Transactions completed by strategic acquirers rose from 138 to 163 deals, whereas those backed by financial sponsors improved from 52 to 57 deals. Aggregate value fell 43 percent, from $10.70 billion to $6.06 billion. However, value gained 24 percent on a year-over-year basis. Also of note, seven of the industry’s top ten largest deals last year occurred in second 2014.

The peak for volume throughout the previous two-and-a-half years occurred in first half 2015 while value reached its zenith in second half 2014. In terms of valuations, the median revenue multiple over the past six months decreased from 3.0x to 2.7x, which remained slightly above its median throughout the last 30 months.

The industry’s largest transaction year-to-date was MEDNAX’s acquisition of vRad, an outsourced radiology physician services and telemedicine company, for $500 million. This occurred in the Healthcare Business Services segment. Meanwhile, M&A activity in the segment increased 53 percent, from 34 to 52 deals.

Transaction volume in the Healthcare IT segment remained about constant, with a total of 101 deals. This represented a 29 percent increase compared to first half 2014 and was the segment’s highest point throughout the past two-and-a-half years. Moreover, there was a 16 percent rise in the number of strategic acquisitions in the Healthcare IT segment, from 69 in second half 2014 to 80 deals in first half 2015. Strategic acquirers accounted for 79 percent of Healthcare IT volume year-to-date.

The Consumer Health segment saw a slight uptick, from 14 to 16 deals. Clothing manufacturer Under Armour was a notable Consumer Health acquirer with two mobile-based acquisitions in first half 2015 relating to digital health data, nutrition information, and fitness tracking. Along these lines, Under Armour acquired MyFitnessPal for $475 million and Endomondo for $85 million. These two transactions will build upon Under Armour’s previous acquisition of MapMyFitness for $150 million in 2013.

As for other markets covered in the report, volume in the Medical Education segment more than doubled, from 9 to 20 deals. Transaction volume in the combined Pharma IT, Pharma Business Services, and Pharma Information stayed nearly the same, from 23 to 25 deals. One of the largest related transactions in first half 2015 was ICON’s acquisition of MediMedia Pharma Solutions, a provider of scientific analysis, assessment, research and insights for the biopharmaceutical and medical device industries, for $120 million.

“In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are healthcare information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.”

O’Connor continued, “Interestingly, strategic buyers are dominating the deal flow and high multiples. However, financial buyers remain on the hunt, are focused on high growth assets, and have over $500 billion of dry powder which they can leverage 4x-8x. We haven’t seen such a seller’s market since the 2004-2007 timeframe. With all the attractive dynamics noted above there remains a lack of quality assets of scale available, so any attractive assets are commanding high valuations and multiple buyers.”

“The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, shifting responsibilities between payors and providers, and in increased regulatory environment,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enable healthcare IT companies that effectively address market niches and have some level of scale are in high demand by both financial and strategic buyers.”

Berkery Noyes: Education Industry M&A Report For Half Year 2015

Berkery Noyes, an independent mid-market investment bank, has released its half year 2015 mergers and acquisitions trend report for the Education Industry.

The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information and technology companies servicing the Education Industry, including the K-12, Post-Secondary, Childcare Services, and Corporate and Professional Training segments.

Total transaction volume improved nine percent on a half year basis. In addition, private equity volume rose 38 percent, with a total of 51 transactions in first half 2015. Aggregate value increased 29 percent, from $4.75 billion to $6.11 billion. The peak for volume over the previous five half year periods occurred in first half 2015 whereas value reached its zenith in first half 2014.

As for overall value, nine of the top ten deals thus far in 2015 were completed by strategic acquirers. The industry’s largest transaction year-to-date was LinkedIn Corporation’s acquisition of Lynda.com, an online learning company that provides video tutorials and courses covering business, software, creative, and other areas, for $1.5 billion. This deal represented slightly more than one-fifth of the industry’s total value in first half 2015.

Deal volume in the K-12 Media and Tech segment increased 39 percent in first half 2015. Notable transactions included Houghton Mifflin’s acquisition of Scholastic Corporation’s Education and Technology Services business for $575 million; Pearson’s sale of Powerschool, a web-based K-12 student information system, to Vista Equity Partners for $350 million; Pearson’s sale of Family Education Network, a global leader in the consumer informal learning space, which owns one of the largest integrated digital audiences of kids, parents, and teachers in the world, to Sandbox Partners; Data Recognition Corporation’s acquisition of McGraw-Hill Education’s CTB assessment assets; and Blackboard’s acquisition of Schoolwires, an educational website, hosting, and content management provider to K-12 schools.

In terms of Blackboard’s recent deals, the Schoolwires transaction follows its previous acquisition of ParentLink, a provider of K-12 communications tools that help connect teachers with parents, in second half 2014. Blackboard also completed a transaction in the open source space in first half 2015 with the acquisition of Remote-Learner UK. This was Blackboard’s first open source related deal since its acquisition of Moodlerooms and NetSpot in first half 2012.

Meanwhile, the number of transactions in the combined Professional Training Technology and Services segments declined eight percent, from 65 to 60 deals. One high profile Professional Training acquirer year-to-date was Pluralsight with the acquisition of Code School, which offers online courses for developers, for $36 million. Also of note, Pluralsight acquired Smarterer, an online skills assessment platform, for $75 million and Digital-Tutors, an online training resource for creative professionals, for $45 million in 2014.

Regarding the Higher-Ed Media and Tech segment, volume increased 81 percent, from 21 to 38 deals. This was the highest point for Higher-Ed Media and Tech volume during the past two-and-a-half years when examined on a half year basis. Moreover, Higher-Ed Media and Tech was responsible for the industry’s largest rise in volume over the past six months.

“The large strategic players in the sector are the diversified education companies who are steadily moving away from print and becoming more heavily focused on digital and services,” said Peter Yoon, Managing Director at Berkery Noyes. “Companies like Houghton Mifflin continue to acquire as evidenced by their recent purchase of Scholastic’s Edtech division, and McGraw-Hill and Pearson continue to do the same in order to become less dependent on print revenues.”

Yoon continued, “Private equity firms are increasingly being drawn to the education and training sector, given the sheer scale of the market, the favorable lending environment, and the increasing number of companies that are growing with subscription based revenue models in the space. Part of the role that PE firms play in the sector is to create and grow companies of scale, which the strategic players often see as attractive acquisition opportunities due to the larger size. The influx of PE capital creates an environment which actually allows acquisitions by strategics to be more prevalent and impactful to the organization.”

“In the context of strong gains in online testing and assessment, automatic scoring and grading of essays are likely to develop more rapidly,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “One of the main challenges to overcome before this technology is more widely adopted is to improve the training in its use and overall understanding of its reliability and cost effectiveness.” Zandy continued, “At the post-secondary level, online homework grading in subjects such as math, chemistry, and other quantitative disciplines has made some headway. Considerable investment in companies with new assessment products will eventually lead to robust M&A activity with acquirers seeking to participate in this high growth and high profit area.”

Berkery Noyes: Private Equity in the Information Industry M&A Report For Half Year 2015

Berkery Noyes, an independent mid-market investment bank, has released its half year 2015 mergers and acquisitions trend report for Private Equity in the Information Industry.

The report analyzes M&A in the private equity market for the first half of 2015 and compares it with activity in the four previous six-month periods from 2013 to 2014. It features transactions completed by financially sponsored acquirers within the Information Industry, including purchases through subsidiaries or platforms of private equity firms.

Deal volume increased 12 percent on a half-to-half year basis. Total value rose from $23.49 billion to $24.99 billion, a six percent gain. The peak for private equity volume during the past two-and-a-half years occurred in first half 2015, whereas value reached its zenith in first half 2014. The median revenue multiple improved from 1.8x to 2.5x, while the median EBITDA multiple declined from 16.8x to 14.5x.

The Information Industry’s most active financial sponsor in first half 2015 was Vista Equity Partners with 12 transactions. Based on publicly disclosed values, the largest of these deals was Vista’s acquisition of Powerschool, a web-based K-12 student information system, for $350 million.

Meanwhile, Marlin Equity Partners was another active private equity firm in the Software market with eight transactions year-to-date. This consisted of Resolution1Security and Fidelis Cybersecurity Solutions in the cyber-security subsector; e-MDs and HomecareCRM in the Healthcare IT sector; International Business Systems in the enterprise resource planning and supply chain subsectors; Arcplan, a business intelligence and corporate performance management company; Asentinel, a telecom expense management firm; and barometerIT, a provider of IT portfolio analysis solutions.

 Regarding the horizontal Software market, private equity deal volume improved 11 percent. One high value deal in the security subsector was Bain Capital’s acquisition of Blue Coat Systems for $2.4 billion. Of note, an investor group led by Thoma Bravo previously took Blue Coat private in 2011 for $1.1 billion.

As for the Media and Marketing horizontal, private equity transaction value increased from 16 percent to 30 percent of total value. Notable secondary buyouts in the horizontal thus far in 2015 included GTCR and Adams Outdoor Advertising’s acquisition of Fairway Outdoor Advertising from Acon Investments for $575 million; Capmark Financial Group’s acquisition of Orchard Brands from Golden Gate Capital for $410 million; and Providence Equity Partners’ acquisition of Clarion Events from Veronis Suhler Stevenson for $307 million.

In terms of specific verticals, private equity volume in the Education market rose 38 percent in first half 2015, from 37 to 51 deals. Providence Equity Partners and The Riverside Company were the industry’s most active Education acquirers with three transactions each in the space year-to-date, which includes those either purchased directly or through an affiliated business.

Riverside acquired Health and Safety Institute, an emergency care and response training organization; C-Learning, an e-learning course developer; and Digital Ignite, a continuing education and social learning platform. Providence Equity acquired Remote-Learner UK, which provides hosting, support, consulting services to the education industry; Schoolwires, an educational website, hosting and content management provider to K-12 schools; and Endeavour College of Natural Health, a vocational training institution in the health and wellness sector.

Sponsored deal volume in the Finance vertical remained nearly constant over the past six months. However, activity the Capital Markets segment increased 38 percent, from 13 to 18 deals. BlackFin Capital Partners and Genstar Capital were the industry’s most active acquirers in the Finance vertical with three transactions each in the space year-to-date, which includes those either purchased directly or through an affiliated business.

Genstar acquired All Web Leads (AWL), a customer acquisition marketing business that serves the U.S. insurance industry; Financial Webworks (FWW), a provider of fund data and regulatory documentation to fund distributors; and Intelligent Financial Systems, a software company focused on financial data market research. BlackFin Capital Partners acquired SmartCo, an enterprise data management software company that serves financial institutions; AMfine Services and Software, which offers regulatory, tax, and financial reporting solutions to asset management companies; and Nexfi SAS, a provider of front and middle office management solutions to financial portfolio managers.

The largest private equity backed deal in the Capital Markets segment year-to-date was Bridepoint’s acquisition of eFront SA, a software solutions business focused on enterprise risk management and alternative investments, for $327 million.
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“Strong balance sheets, less restrictive lending, and more plentiful private sellers are fueling deal activity,” said James Berkery, Chief Information Officer at Berkery Noyes. “Valuations have also been robust over the past few years, especially as financial sponsors compete with strategic acquires for companies that have attractive components such as recurring revenue models, high margins, continuous growth, diversified customer concentration, and proprietary technology in markets with a barrier to entry.”

Dow Jones VentureSource 2Q’15 U.S. Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 2Q 2015 include: 

• U.S. venture capital fundraising increased both in number of funds and amount invested; Venture capital investment into U.S. companies on the rise quarter-over-quarter ;
  Median pre-money valuation decreased 3% from 1Q 2015;
• Amounts raised through Initial public offerings (IPOs) went up, while mergers and acquisitions (M&As) experienced a decrease from the previous quarter.

FUNDRAISING 

Venture Fundraising Increases in U.S. during 2Q 2015 

• 86 funds garnered $12.9 billion in 2Q 2015, both an increase in the amount raised (51%) and increase in number of funds (23%) from the prior quarter.
• New Enterprise Associates 15 LP was the largest U.S. venture capital fund of 2Q 2015 raising almost $3.2 billion and accounting for 24% of the total amount raised during the quarter.
• Median U.S. fund size was $125 million in the first half of 2015.

U.S. Venture Investment in 2Q 2015 on the Rise 

• U.S.-based companies raised $19 billion in 1034 venture capital deals in 2Q 2015, a 15% rise in capital raised, with number of deals also experiencing an increase of 12% from the previous quarter.
• Compared to the same period in 2014, amount invested went up 24%, while number of deals experienced a minimal decrease.
• Business and Financial Services is the strongest sector with 30% share of total amount invested

FINANCING 

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (2Q 2015) 

• Business and Financial Services received the largest investment allocation during 2Q’15 (30%), accumulating almost $5.8 billion through 286 deals. The figures represent a respective increase of 48% and 20% from 1Q’15.
• The Consumer Services placed second in terms of equity financing, taking a 24% share of all 2Q’15 investment. 197 deals drew $4.7 billion, up 8% in capital raised.
• Healthcare ranked third with almost $3.9 billion in 195 deals, 1% lower from the previous quarter. The sector’s investment figure represents a 20% share of total equity investment into U.S. VC-backed companies for the quarter.
• $3.5 billion were raised by Information Technology (IT) in 273 deals, an increase of 16% in capital invested and 5% in deal flow.

LIQUIDITY 

U.S. VC-backed IPOs (2012-2015) 

• 27 venture-backed companies raised $2.5 billion through public offerings in 2Q 2015. Number of deals increased by 125% and capital raised more than tripled the amount from the previous quarter ($912 million).
• The largest IPO of the quarter was FitBit Inc. (NYSE: FIT), which completed a $732 million IPO.

Dow Jones VentureSource 2Q’15 China Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for Chinese venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 2Q 2015 include: 

• Chinese venture capital fundraising halved from previous quarter despite an increase in fund closings;
• Venture capital investment into Chinese companies eclipses amount raised in each of the previous two quarters to reach record high;
• Exit activity improves as mergers and acquisitions (M&As) rise and initial public offerings (IPOs) surge to highest number since 4Q 2010.

 
FUNDRAISING 

Chinese Venture Capital Fundraising Falls in 2Q 2015 Despite Rise in Closings 

• Chinese venture fundraising fell to $1.2 billion across 18 funds during 2Q 2015, a decline of 50% in dollars raised despite a 50% increase in the number of fund closings.
• In comparison with the same period last year, dollars raised fell by 62%. However, the number of venture funds with closings improved by 29%.
• Huochai Kuailu Investment Fund was the largest of 2Q 2015, raising $484 million and accounting for 39% of the total amount raised in funds for the quarter.
• Chinese VC Fundraising 20 (2012 – 2015)

 

FINANCING 

Equity Financings into China-based, VC-backed Companies, by Industry Group (2Q 2015) 

• Consumer Services companies took just over $5 billion through 173 deals during 2Q 2015, a rise of 11% in dollars invested and 47% in deals completed from 1Q 2015. The sector attracted 48% of all deals completed for the quarter and a 60% share of total amount invested.
• Business and Financial Services companies raised the second highest proportion of investment during 2Q 2015. The sector garnered $2.2 billion across 99 deals; a 52% increase in dollars accrued and a 77% improvement in deal flow from the prior quarter.
• The Information Technology sector placed third for investment, receiving $852 million across 57 deals. Sector investment rose by 54% from 1Q 2015 while deal flow improved by 21%. The sector’s investment figure represents 10% of the total equity financing into China-based VC-backed companies for 2Q 2015.

LIQUIDITY 

Venture M&A and IPO Market Activity in China (2Q 2015) 

Exit Opportunities for Chinese VC-backed Companies

• 17 M&As were completed by venture-backed companies in China during 2Q 2015, eight more than in the previous quarter and nine more than in 2Q 2014.
• The largest M&A of the quarter was Jiangsu Sanyou Group’s reverse merger with healthcare check-up services provider Meinian Onehealth Healthcare Group in April for $894 million.
• 44 VC-backed companies went public during 2Q in China, the most in a single quarter since 50 IPOs were completed during 4Q 2010.

Chinese VC-backed IPOs

• 44 VC-backed companies went public during 2Q in China, doubling the number for 1Q 2015 and quadruple the number completed in 2Q 2014. Dollars raised through listings more than tripled the previous quarterly total to reach $5.6B. The figure doubled the $2.75 billion raised through IPOs during 2Q 2014 and is the highest quarterly figure since 1Q 2011 ($6B).
• China National Nuclear Power Co. Ltd. had the largest IPO of the quarter, raising over $2.1 billion for its June listing on the Shanghai Stock Exchange. The nuclear power provider’s IPO represents 38% of the total raised through VC-backed IPOs in China during 2Q 2015.

Dow Jones VentureSource’s Venture Capital Report Europe | 2Q | 2015

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 2Q 2015 include: 

• European venture capital fundraising doubles from prior quarter;
  Venture capital investment into European companies improves in consecutive quarters;
• Initial public offerings (IPOs) experienced an increase from the prior quarter, while the number of mergers and acquisitions (M&As) fell to its lowest level since 1Q 2013.

FUNDRAISING 

European Venture Capital Fundraising Improves in 2Q 2015 

• 25 European venture capital funds accumulated over €2 billion during 2Q 2015, more than double the euros raised in 1Q 2015 with a 47% increase in the number of fund closings.
• Compared with the year ago period, euros raised improved by 63% in two more fund closings.
• The largest fund of the quarter was Index Ventures Growth Fund III, which raised €650 million, accounting for 32% of the total amount raised for 2Q 2015.

FINANCING 

Investment into European Venture-backed Companies Improves Once More in 2Q 2015 

• European companies raised just over €3 billion for 357 deals during 2Q 2015, an increase of 12% in the amount raised from 1Q 2015 despite a 5% slide in the number of deals completed.
• In contrast with the year ago period, investment improved by 31% despite a 15% reduction in the number of completed deals.
• Consumer Services was the strongest sector of the quarter in terms of attracting investment followed by Business and Financial Services. The sectors garnered 45% and 24% of all euros invested during 2Q 2015 respectively.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (2Q 2015) 

• Consumer Services received the largest allocation of investment during 2Q 2015 (45%), accumulating €1.4 billion through 91 deals. Deal flow fell by 22% from the prior quarter, while sector investment dipped by 1%.
• Business and Financial Services placed second in terms of equity financing, taking a 24% share of all 2Q 2015 investment. The sector raised €716 million across 99 deals, an improvement of 53% in capital raised and 16% in deals completed from the previous quarter.
• Healthcare placed in third, with companies in the sector gathering 15% of the total amount invested for the quarter. The sector received €458 million across 52 deals; a rise of 48% in capital invested from 1Q 2015 despite a 10% decline in deal flow.

Equity Financings into Europe-based, VC-backed Companies, by Country (2Q 2015) 

• The United Kingdom was the most favoured destination for equity financing during 2Q 2015, receiving €645 million across 89 deals. The country took 21% of all equity financing for the quarter, despite a 28% fall in investment from 1Q 2015.
• Sweden placed second, attracting a 19% share of European financing. Investment reached a total €596 million, bolstered in large part by Spotify Technology’s most recent round of financing in April.
• Germany occupies third position raising €508 million, 17% of the total for the quarter. France placed fourth with a 15% share, raising €449 million during 2Q 2015.

LIQUIDITY 

Europe 2Q 2015 Venture Exit Activity 

• 37 venture-backed M&As took place in Europe during 2Q 2015, a drop of 27% from 1Q 2015 and 12% from 2Q 2014.
• The largest M&A for 2Q 2015 was Yemek Sepeti Elektronik Iletisim Tanitim, a provider of online food ordering services in Turkey, which was acquired by Delivery Hero Holding AG for €526 million.
• 15 venture-backed IPOs took place during 2Q 2015, a 25% rise from the prior quarter but a 29% decline in listings for VC-backed companies from the year ago period.

European VC-backed IPOs (2012-2015) 

• 15 venture-backed IPOs took place during 2Q 2015, an increase of three from the prior quarter but six fewer than in the year ago period.
• IPOs raised €533 million during 2Q 2015, an uptick of 28% from the $417 million raised in 1Q 2015. VC-backed companies raised an almost identical amount through IPOs compared with the year ago period (€530 million).
• The largest European VC-backed IPO of 2Q 2015 was the windeln.de GmbH listing in May. The company raised €183 million for its offering on the Deutsche Boerse.

Dow Jones VentureSource’s Venture Capital Report U.S. 1Q 2015

U.S. | 1Q | 2015

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. 

Highlights for 1Q 2015 include:

U.S. venture capital fundraising decreased both in number of funds and amount invested;
Venture capital investment into U.S. companies experienced a minimal increase quarter-over-quarter ; Median pre-money valuation increased 29% from 4Q 2014;
Amounts raised through both Initial public offerings (IPOs) and mergers and acquisitions (M&As) experienced a decrease from the previous quarter.

FUNDRAISING 

Venture Fundraising Increases in U.S. during 1Q 2015 

• 56 funds garnered $8.1 billion in 1Q 2015, a 2% decrease in the amount raised, and also a 42% drop in number of funds from the prior quarter.
• Bessemer Venture Partners IX LP was the largest U.S. venture capital fund of 1Q 2015 raising $1.6 billion and accounting for 20% of the total amount raised during the quarter.
• Median U.S. fund size was $121 million in the first quarter of 2015.

U.S. Venture Investment in 1Q 2015 Registers Slight Improvement from 4Q 2014 

• U.S.-based companies raised $15.7 billion in 875 venture capital deals in 1Q 2015, a 1% rise in capital raised, however, the number of deals fell slightly (2%) from the previous quarter.
• Compared to the same period in 2014, amount invested went up 27%, while number of deals registered a 9% decrease.
• Healthcare and Business and Financial Services are the strongest sectors, respectively with 25% and 24% share of total amount invested.

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (1Q 2015) 

• Healthcare received the largest investment allocation during 1Q’15 (25%), accumulating $3.9 billion through 185 deals. The figures represent a respective increase of 50% and 19% from 4Q’14.
• The Business and Financial sector placed second in terms of equity financing, taking a 24% share of all 1Q’15 investment. 230 deals drew $3.7 billion, up 4% in capital raised.
• Consumer Services ranked third with almost $3.7 billion in 156 deals, dropping 17% from the $4.4 billion accumulated in the previous quarter. The sector’s investment figure represents a 23% share of total equity investment into U.S. VC-backed companies for the quarter.
• $2.8 billion were raised by Information Technology (IT) in 240 deals, a decrease of 26% in capital invested and 9% in deal flow.

LIQUIDITY 

Venture M&A and IPO Market Activity in the U.S. during 1Q 2015 

• Mergers and acquisitions (M&As) of venture-backed companies dropped 71% from 4Q 2014, with 104 deals garnering $9.9 billion.
• Initial public offering (IPO) activity decreased in 1Q 2015 raising $912 million, down 71% from the previous quarter.

U.S. VC-backed M&As

• 104 M&As of venture-backed companies in the U.S. garnered $9.9 billion during 1Q 2015.
• In contrast with 4Q 2014, when a total of 109 transactions accumulated almost $34 billion, both number of deals and amount raised decreased by 5% and 71% respectively.
• The largest M&A of the quarter was Flexus Biosciences Inc., which was acquired by Bristol-Myers Squibb (XNYS:BMY) for $1.25 billion.

U.S. VC-backed IPOs (2012-2015) 

• 12 venture-backed companies raised $912 million through public offerings in 1Q 2015. Number of deals decreased by 48% and capital raised registered a 71% drop from the previous quarter.
• The largest IPO of the quarter was Box Inc. (NYSE: BOX), which completed a $175 million IPO.

Dow Jones Venture Capital Report Europe 1Q 2015

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. 

Highlights for 1Q 2015 include: 

European venture capital fundraising down by a quarter from 4Q 2014;
Venture capital investment into European companies rose to highest figure since 3Q 2001;
Though exits via mergers and acquisitions (M&As) and initial public offerings (IPOs) rose slightly from the prior quarter, euros raised through IPOs shrunk to less than a fifth of the 4Q 2014 total.

 

 
FUNDRAISING 

European Venture Capital Fundraising Experiences Downturn in 1Q 2015

• 13 European venture capital funds accumulated €874 million during 1Q 2015, a decline of 25% in euros raised and 38% in the number of funds with closings from 4Q 2014.
• Despite the decline in fundraising from 4Q 2014, euros raised improved by 36% compared with the year ago period, despite the number of funds with closings falling by 43%.
• The largest fund of the quarter was HV Holtzbrinck Ventures Fund VI which raised €285 million, accounting for 33% of the total amount raised for 1Q 2015.

FINANCING 

Investment into European Venture-backed Companies Improves in 1Q 2015 

• European companies raised €2.6 billion for 345 deals during 1Q 2015, an increase of 41% in the amount raised from 4Q 2014 despite a 5% slide in the number of deals completed.
• In contrast with the year ago period, investment improved by 63% despite a 12% reduction in the number of completed deals.
• Consumer Services was the strongest sector of the quarter in terms of attracting investment with Business and Financial Services in second. The sectors garnered 50% and 17% of all dollars invested during 1Q 2015 respectively.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (1Q 2015)

• Consumer Services received the largest allocation of investment during 1Q 2015 (50%), accumulating €1.3 billion through 103 deals. Although deal flow remained relatively steady, sector investment quadrupled from the 4Q 2014 figure of €326 million.
• Business and Financial Services placed second in terms of equity financing, taking a 17% share of all 1Q 2015 investment. The sector raised €443 million across 82 deals, a decline of 26% in capital raised and 12% in deals completed from the previous quarter.
• Information Technology placed in third, with companies in the sector gathering 16% of the total amount invested for the quarter. The sector received €436 million across 75 deals; a rise of 65% and 1% from 4Q 2014 in capital invested and deal flow respectively.

Equity Financings into Europe-based, VC-backed Companies, by Country (1Q 2015) 

• Germany was the most favoured destination for equity financing during 1Q 2015, receiving €921 million across 64 deals. The country took 35% of all equity financing for the quarter, tripling its 4Q 2014 investment total.
• The United Kingdom placed second, attracting a 34% share of European financing. Investment rose by 54% from the prior quarter to total €886 million while deal flow increased by 16%.
• France occupies third position raising €292 million, 11% of the total for the quarter. Austria rose to fourth position with a 7% share, raising €173 million during 1Q 2015.

LIQUIDITY 

Europe Sees Improvement in 1Q 2015 Venture Exit Activity from Prior Quarter

• 49 venture-backed M&As took place in Europe during 1Q 2015, up 7% from 4Q 2014 but down 6% on the figure for 1Q 2014.
• The largest M&A for 1Q 2015 was Trophos SA, a developer of compounds for the treatment of neurological and cardiac diseases, which was acquired by Roche AG for €470 million.
• 12 venture-backed IPOs took place during 1Q 2015, two more than those seen in the prior quarter and four more than the listings for VC-backed companies completed in the year ago period.

European VC-backed IPOs

• 12 venture-backed IPOs took place during 1Q 2015, two more than those seen in the prior quarter and four more than the listings for VC-backed companies completed in the year ago period.
• IPOs raised €417 million during 1Q 2015, a decline of 81% from the $2.25 billion raised in 4Q 2014, which was the highest total for a single quarter since 2Q 2000. Compared to the year ago period, VC-backed companies raised 7% less through IPOs during 1Q 2015.
• The largest European VC-backed IPO of 1Q 2015 was Ascendis Pharma’s January listing on the NASDAQ. The company raised a total of €89 million, accounting for 21% of the total amount raised through European venture- backed company IPOs for the quarter.