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.