Embed Size (px)
Citation preview
Venture Capital Insights® – 4Q14
Global VC investment landscape
January 2015
Page 1 Venture Capital Insights® – 4Q14
► Bryan Pearce, Global Leader, Entrepreneur of The YearTM and Global
Venture Capital Advisory Group, EY
► Jeff Grabow, United States, Venture Capital Leader, EY
► Sandra Feldner Vandergriff, Venture Capital Advisory Group, EY
► Shanta Kumari, EY Knowledge, EY
► Vidhi Gupta, EY Knowledge, EY
Insights development team
* All data contained in this is sourced to Dow Jones VentureSource unless otherwise noted.
Page 2 Venture Capital Insights® – 4Q14
Section 1: Global VC investment landscape Analysis by geography, hotbed, sectors, stages of development and round classes
Page 3 Venture Capital Insights® – 4Q14
Section 1: Global VC investment landscape Summary
Global VC investment activity:
► 2014 was a record year in terms of VC investment activity. The year saw US$86.7b invested in 6,507 deals,
hitting the highest annual investment mark since 2000. Strong investment activity was seen in the second
and fourth quarters of 2014, with both quarters recording more than US$20b funding with more than 1,500
deals each.
► In terms of quarterly VC investment, the average deal size was the highest for 4Q14 (US$16.7m) compared
to the average values in 1Q08, which remained below US$14m.
► In 2015, global venture capital-backed deal activity is likely to continue its current upward trend driven by a
consistent pipeline of new IPO listings along with improved investor confidence.
► The Bay Area maintained its lead during 2014 with amount invested almost twice the levels seen in 2013.
Beijing made a comeback in the top five hotbeds replacing UK, recording a 237% increase in the amount
invested compared to 2013.
► The consumer services sector continued to lead the global VC landscape in terms of the amount invested in
2014 driven by large-sized funding deals of mobile-based platform companies such as Uber Technologies,
Snapchat, Instacart and Flipkart International Private Limited.
► Investments at the later stage almost doubled in 2014 compared to the historical levels. A similar trend was
also seen for investments made in companies operating at generating revenue stage.
► VC investors made larger investments in the early stage round classes as noted by the increased median
deal sizes for most markets in 2014. During the year, the median deal size also increased across all stages
of development, and across all VC geographies, compared to 2013.
Page 4 Venture Capital Insights® – 4Q14
Global venture capital investment 2014 was a record year in terms of VC investment activity; the highest since 2000
Global VC activity – by amount invested and number of rounds
► 2014 closed on a strong note in terms of global VC investment. With US$86.7b funded through 6,507 deals, the year hit the highest annual investment mark in the last 13
years. Investment activity was particularly strong in the second and fourth quarters, with both quarters recording over US$20b funding and each with over 1,500 deals for
the quarter.
► 4Q14 was also the strongest quarter since 3Q00 in terms of quarterly VC investment. The last quarter of 2014 recorded US$26.1b invested in 1,560 deals – a 31% increase in
value despite a 4% decline in deal volume compared to 3Q14. Subsequently, the average deal size was the highest during 4Q14 (US$16.7m )compared to the average values
recorded since 1Q08 where it remained below US$14m.
► The outlook for VC investing and VC-backed companies remains positive as improving economic conditions continue to support the global fundraising environment. In 2015,
global VC-backed deal activity is likely to continue its current upward trend driven by a consistent pipeline of new IPO listings along with improved investor and general partner
confidence.
13.6 6.8 9.9 13.0 11.2 10.9
17.6
19.9 26.1 13.7
8.5 11.8 14.5 13.9 13.5
23.1
13.8
8.7
9.7
15.5 11.3 14.5
19.9
10.1
11.4
15.2
13.0
13.1 14.6
26.1
5,500
4,813
5,458
6,040 6,085 6,551 6,507
1,361 1,531 1,550 1,516 1,542 1,808
1,560
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inv
este
d (
US
$b
)
Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year/qtr Number of rounds during Q4
51.1 35.6 46.6 56.0 49.8 53.5 86.7 19.9 26.1
1,620
1,560
Note: Global total includes the US, Europe, Canada, China, Israel (all site) and India only.
Page 5 Venture Capital Insights® – 4Q14
US
Europe
► In 2014, VC funding was at its all time high for the three key VC markets – the US,
Europe and China – compared to the levels seen globally in 2008. During the year,
while investments increased by 47% and 27%, respectively, for the US and Europe,
it almost tripled for China compared to 2013. Strong activity in the information
technology and consumer services sector drove this increase in China.
► VC investment continued to be strong in the US and China during 4Q14 driven by
few mega-deals that were more than US$1b each with Uber and Beijing’s Xiaomi
Technology Co Ltd, leading the top quarterly deals, funding dropped by 29% in
Europe, compared to 3Q14 due to slow activity across all industry sectors. Deal
volume did not see much change in any of these markets.
► The current trend across the key VC markets suggests VC investing will maintain its
momentum through 2015. As investor confidence continues to build with improving
market conditions and investment returns on upswing, strong levels of investing is
likely to be seen in the year to come.
China
Venture capital investment by geography 2014 had the highest level of VC investing seen in the US, Europe and China
9.1 4.7 5.4 8.2 7.8 7.6 12.1 11.2 13.8
8.4
6.3 7.7
9.2 9.6 8.7
15.0 9.2
6.1 6.2
10.8 8.0 9.5
11.2 6.7
7.6 9.6
8.2 9.3 9.6
13.8 3,100 2,794
3,204
3,683 3,785 3,837 3,682
711 848 889 918 932
1,013 814
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
10
20
30
40
50
60
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inve
ste
d (
US
$b
)
6.5 5.0 4.3 4.9 4.1 4.1 5.5
Median amount invested (US$m)
5.1 6.8
928 814
2.2 1.1 1.4 1.9 1.4 1.6 2.1
3.1 2.2
1.8
1.1 1.6
1.8
2.0 2.0
3.1
2.1
1.3 1.4
1.8 1.4
2.3
3.1 1.9
2.3
2.6
2.0 1.6
2.4
2.2
1,502
1,314 1,431
1,379 1,421
1,636 1,460
442 452 430 374 373
461
332
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
2
4
6
8
10
12
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s A
mo
un
t in
ve
ste
d (
US
$b
)
1.2 0.5 2.4 1.8 1.2 0.7 2.4 3.0 6.8 1.8
0.7
1.1 2.0 1.5
1.2
3.4 1.4
0.8
1.1 1.8
0.9 1.5
3.0
0.7
0.9
2.0 1.7
1.4 1.4
6.8
375 335
423 465
320
439
740
85 116
128 112 86 136
243
0
100
200
300
400
500
600
700
800
0
2
4
6
8
10
12
14
16
18
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inve
ste
d (
US
$b
)
Median amount invested (US$m) Median amount invested (US$m)
2.9 2.1 2.5 2.1 2.0 1.9 2.7 2.7 3.1 6.8 5.3 7.5 10.0 6.5 4.0 9.6 5.0 10.0
337 332 207 243
Amount invested during Q1 (US$b) Amount invested during Q2 (US$b) Amount invested during Q3 (US$b)
Amount invested during Q4 (US$b) Number of rounds during the year/quarter Number of rounds during Q4
Page 6 Venture Capital Insights® – 4Q14
02
Venture capital investment by geography India continued to see a surge of VC activity in 4Q14 driven by consumer services sector deals
► During 4Q14, investment activity remained soft in the smaller VC markets namely,
Canada and Israel. For both markets, the funding level in the last quarter of 2014
was mostly in line with the levels seen during 2Q14 and 3Q14. This was despite an
increase in deal volume recorded during 4Q14 for both markets – 24% for Canada
and 7% for Israel compared to the 3Q14.
► Even on a yearly basis, the growth in VC activity for Canada and Israel was
relatively slower compared to other VC markets. During 2014, while Canada saw
21% increase in funding, Israel recorded 10% increase over the prior year, with a
marginal change in deal volume.
► India was an exception, among the smaller markets, where VC investments
continued on the upward trajectory in 4Q14 in India, closing the year with US$5.2b
through a total of 260 deals (highest aggregate value and volume since 2008). The
two mega deals of nearly US$700m of consumer services sector-based Flipkart.com
and Snapdeal.com in 4Q14 drove 35% increase in investments compared to 3Q14.
0.8
0.2 0.3 0.3 0.3 0.3 0.4 0.5 0.6
0.6
0.2
0.9
0.7
0.2
0.7 0.5
0.5
0.3
0.2 0.4
0.3
0.4 0.5
0.3
0.2
0.5 0.6
0.4
0.4 0.6
292
181
165 185 167
201 196
71 53 45
41
53 62
45
0
50
100
150
200
250
300
350
0
1
2
3
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inve
ste
d (
US
$b
)
0.2 0.1 0.2
0.4 0.2 0.2 0.2
0.4 0.4 0.1
0.1 0.2
0.4
0.2 0.2 0.4
0.3
0.1
0.4
0.3
0.3 0.3
0.4 0.2
0.2
0.2
0.1
0.3
0.4
0.4
110
91 114
142
151 186 169
26 24 23 28 39
65
47
-50
0
50
100
150
200
0
1
2
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inve
ste
d (
US
$b
)
0.2 0.2 0.2 0.4 0.4 0.4 0.5
1.7 2.3 1.0
0.1 0.2 0.4 0.3 0.6
0.7 0.4
0.1 0.2
0.4 0.5 0.5
1.7 0.2
0.3 0.3
0.4 0.4 0.4
2.3
121
98
121
186
241 252 260
26 38 35 43
59 71
79
0
50
100
150
200
250
300
0
1
2
3
4
5
6
2008 2009 2010 2011 2012 2013 2014 Q3 Q4
Nu
mb
er o
f rou
nd
s
Am
ou
nt
inve
ste
d (
US
$b
)
38 47
42 45
68 79
Canada
5.0 4.3 4.9 5.0 2.8 2.3 3.5
Median amount invested (US$m)
5.0 4.4
India
Median amount invested (US$m)
7.3 4.2 6.7 5.0 3.8 4.0 4.5 5.0 4.7
Israel (all site)
Median amount invested (US$m)
5.2 4.0 5.3 7.2 4.3 5.0 6.0 6.3 9.0
Amount invested during Q1 (US$b) Amount invested during Q2 (US$b) Amount invested during Q3 (US$b)
Amount invested during Q4 (US$b) Number of rounds during the year/quarter Number of rounds during Q4
Page 7 Venture Capital Insights® – 4Q14
► With strong activity in the business and financial services and consumer services sectors, the Bay Area maintained its dominance during 2014 with amount invested, which was
almost twice the levels seen in 2013 US$24.7b in 2014 compared to US$13.9b in 2013.
► During 2014, Beijing made a comeback into the top five hotbeds replacing the UK, recording a 237% increase in the amount invested compared to 2013. During the year, VC
investors actively invested in the region particularly consumer information services sub-sector with a focus in the shopping facilitator space.
► In 4Q14, Beijing was the second-most preferred VC destination after Bay Area, reaching a 120% increase in VC funding when compared to the previous quarter due to
significant investment activity in the consumer services and information technology sectors. During the current quarter, the hotbed saw a US$1.1b deal in the software sector-
based Beijing Xiaomi Technology, which was the largest deal in China and also the second-largest deal of the entire quarter.
Venture capital investment by hotbed Beijing was the second-most preferred VC destination after the Bay Area in 4Q14
Updated
9
59
28
47
66
22
45
50
69
27
65
87
104
122
281
Number of rounds
104
274
325
388
406
425
588
629
657
757
1,077
1,280
1,326
3,724
5,631
Switzerland
France
Potomac
Canada
Germany
Illinois
Israel (All Site)
Shanghai
UK
Bengaluru
S. California
New England
NY Metro
Beijing
Bay Area
Amount invested (US$m)
Top five hotbeds1
US$13.0b
(74% of the total2)
Top five hotbeds1
659
(61% of the total2)
113
385
408
414
557
658
880
916
957
1,034
1,480
1,817
2,280
3,274
8,791
Bengaluru
Switzerland
Illinois
Shanghai
Canada
Potomac
Israel (All Site)
Beijing
France
Germany
UK
NY Metro
S. California
New England
Bay Area
Amount invested (US$m)
Top five hotbeds1
US$17.6b
(74% of the total2)
2009 4Q14
317
384
756
823
1,184
1,208
1,282
1,637
1,990
2,005
2,851
3,347
3,869
4,019
14,154
Bengaluru
Switzerland
Illinois
Germany
Shanghai
Canada
France
Potomac
Israel (All Site)
UK
Beijing
NY Metro
New England
S. California
Bay Area
Amount invested (US$m)
Top five hotbeds1
US$28.2b
(71% of the total2)
2011
413
497
598
789
1,120
1,164
1,172
1,753
2,038
2,292
2,428
3,256
3,637
3,820
13,917
Switzerland
Illinois
Bengaluru
Shanghai
Canada
France
Potomac
Israel (All Site)
Germany
Beijing
UK
S. California
NY Metro
New England
Bay Area
Amount invested (US$m)
Top five hotbeds1
US$27.0b
(70% of the total2)
2013
547
822
862
1,250
1,358
1,930
2,083
2,248
2,707
2,858
4,082
4,788
5,333
7,713
24,763
Switzerland
Potomac
Illinois
France
Canada
Israel (All Site)
Shanghai
Bengaluru
UK
Germany
S. California
New England
NY Metro
Beijing
Bay Area
Amount invested (US$m)
Top five hotbeds1
US$46.7b
(74% of the total2)
2014
Note: 1 Top five hotbeds by amount invested. 2 Total of 15 major VC hotbeds listed above.
Page 8 Venture Capital Insights® – 4Q14
Venture capital investment by industry Driven by big ticket deals, consumer services dominated in both value and volume in 2014
By number of rounds:
► In 4Q14, the information technology and the consumer services sectors drove VC activity in deal volume. These two sectors recorded close to 430 deals each, cumulatively
accounting for 55% of the total VC deals for the quarter.
► On a yearly basis however, VC investors preferred to invest in the consumer services sector in 2014 more than in the information technology, which was the leading sector for
the last three years. With 1,690 deals, the consumer services sector led all sectors, closely followed by the business and financial services sector with 1,682 deals.
By amount invested:
► Driven by large-sized deals of mobile-based platform companies such as Uber Technologies, Snapchat, Instacart and Flipkart.com, the consumer services sector continued to
dominate the global VC landscape in terms of the amount invested in 2014. The sector attracted US$29b of investment for the year – the highest amount invested in the sector
in the last six years.
► The consumer services sector maintained its dominance during 4Q14 with deal value increasing by 46% over the previous quarter. The average deal size surged to US$23.4m
in 4Q14 from US$16.1m in 3Q14 as the sector continued to attract bigger ticket deals in the current quarter.
1,670 253
1,179
240
1,332
186
1,170
Information technology
Industrial goods and materials
Healthcare
Energy and utilities
Consumer services
Consumer goods
Business and financial services
2011
1,745
214
1,095
181
1,475
191
1,163
Number of rounds
1,554
145
1,064
121
1,690
226
1,682
2012 2013 2014 3Q14 4Q14
362
39
267
35
424
60
426
429
31
236
30
427
40
359
10.4
2.4
12.7 4.7
13.4 2.1
9.9
Information technology
Industrial goods and materials
Healthcare
Energy and utilities
Consumer services
Consumer goods
Business and financial services
2011
11.3
2.1
11.0
2.5
11.7
1.4
9.4
14.7
4.7
14.0
1.7
29.0
1.7
20.2
2012 2013 2014 3Q14 4Q14
2.8
0.7
3.4
0.3
6.8
0.4
5.3
4.0
2.5
3.4
0.6
10.0
0.4
4.8
11.5
2.1
11.7
1.7
12.6
1.5
12.1
1,738
213
1,130
163
1,544
218
1,535
Updated
Amount invested (US$b)
Note: There are also some deals for which sector has not been assigned.
Page 9 Venture Capital Insights® – 4Q14
Venture capital investment by country In 2014, VC investing in China and India surged to three times the levels seen in 2013
By number of rounds:
► During 2014, the number of deals declined in all markets except for China and India, compared to 2013. China, in particular, saw a huge jump of nearly 70% in the deal volume
largely driven by consumer services sector, the sector saw an influx of 248 in 2014 compared to 111 in 2013 of VC deals from consumer information services sub-sector
in 2014.
► In the US, deal volume declined by 12% in 4Q14 compared to the previous quarter, as investors participated in a smaller number of deals in all industry sectors except for
information technology. Europe also saw a marginal fall of 1% in deal volume, while deal activity increased in all other markets during the same period.
By amount invested:
► Investment activity across markets flourished during 2014 as the year recorded the highest investment levels since 2000. In 2014, VC investors seemed particularly interested in
the two emerging markets – India and China – both of which saw almost a threefold increase of in funding levels compared to 2013.
► The last quarter of 2014 was particularly strong in the US, China and India compared to 3Q14, these markets saw a few megadeals that closed near the end of the quarter. For
other markets, VC investing slowed or remained at a similar level as seen in the previous quarter.
186
185
142
465
1,379
3,683
India
Israel
Canada
China
Europe
US
241
167
151
320
1,421
3,785
252
201
186
439
1,636
3,837
260
196
169
740
1,460
3,682
68
42
38
207
337
928
79
45
47
243
332
814
1.6
2.0
1.2
7.3
7.5
36.4
India
Israel
Canada
China
Europe
US
1.6
1.2
0.9
5.0
6.4
34.6
2.0
1.8
1.1
4.8
8.3
35.5
5.2
1.9
1.4
15.5
10.6
52.1
1.7
0.5
0.4
3.0
3.1
11.2
2.3
0.6
0.4
6.8
2.2
13.8
2011 2012 2013 2014 3Q14 4Q14
2011 2012 2013 2014 3Q14 4Q14
Number of rounds
Amount invested (US$b)
Page 10 Venture Capital Insights® – 4Q14
Venture capital investment by round class and stage of development Investments at later stage almost doubled in 2014 compared to historical levels; a similar trend was seen for investments made in companies operating at generating revenue stage
1,647
1,062
2,314
638
Later stage
Second round
First round
Seed round
2011
1,552
999
2,392
768
Number of rounds
Amount invested (US$b)
2012 2013 2014 3Q14 4Q14
1,541
1,240
2,682
746
1,728
1,343
2,673
455
427
341
685
98
416
323
657
91
28.3
10.8
12.2
0.6
Later stage
Second round
First round
Seed round
2011
26.2
8.3
10.7
0.5
2012 2013 2014 3Q14 4Q14
27.5
11.0
11.1
0.5
48.7
16.3
14.0
0.4
10.2
3.7
3.6
0.1
15.9 5.1
4.0
0.1
316
3,701
1,450
566
Profitable
Generating revenue
Product development
Startup
2011
233
3,913
1,323
612
Number of rounds
Amount invested (US$b)
2012 2013 2014 3Q14 4Q14
278
4,451
1,287
532
274
4,822
1,117
292
52
1,222
279
67
5.9
36.7
12.3
1.1
Profitable
Generating revenue
Product development
Startup
2011
3.4
36.6
8.9
0.8
2012 2013 2014 3Q14 4Q14
4.1
39.8
8.9
0.6
9.2
65.3
11.6
0.5
2.3
14.7
2.8
0.1
2.7
19.8
3.5
0.1
By stage of development
By round class
65
1,173
255
67
Updated
Page 11 Venture Capital Insights® – 4Q14
0.8
0.6
0.7
0.8
0.6
0.7
1.0
0.8
0.6
0.5
0.5
0.3
0.3
0.7
0.7
NS
NS
1.0
0.3
0.4
0.9
0.6
NS
0.9
0.9
0.4
0.1
0.5
0.6
0.6
0.6
0.7
0.5
0.7
0.6
NS
NS
NS
0.3
0.4
0.2
0.5
0
1
2008 2009 2010 2011 2012 2013 2014
Median round size by round class VC investors made larger investments in the early stage round classes as suggested by increased median deal sizes for most markets in 2014
10
.0
8.0
7.7
10
.0
10
.0
10
.0
13
.0
5.9
4.4
5.3
5.5
7.3
6.5
7.6
8.7
7.3
10
.0 2
0.0
19
.0
22
.1 3
2.5
9.5
5.7
8.9
7.3
8.8
4.5
15
.0
9.0
5.9
9.8
11
.0
10
.0
8.0
14
.9
12
.0
11
.5
10
.8
10
.0
8.5
10
.3 20
.2
05
101520253035
2008 2009 2010 2011 2012 2013 2014
8.0
5.0
5.5
6.0
5.5
6.0
6.5
3.8
2.5
3.0
2.9
3.3
3.3
4.0
10
.0
8.0
10
.0
15
.0
15
.4
12
.5 18
.5
5.1
5.3
5.0
6.9
6.0
5.9
4.8
5.8
5.0
6.0
8.0
5.4
8.8
6.3
10
.6
8.0
9.0
7.9
6.1
6.0
8.1
0
4
8
12
16
20
2008 2009 2010 2011 2012 2013 2014
4.1
3.5
3.0
3.0
2.8
2.6
3.1
2.1
1.6
1.8
1.6
1.5
1.3
1.6
5.0
4.0
5.0
7.7
3.2
3.0
4.5
4.0
2.8
3.0
3.0
2.0
1.6
2.2
4.0
2.3
2.0
3.5
3.0
3.0
3.3
6.0
4.0
3.4
4.0
3.3
1.6
1.7
0
2
4
6
8
10
2008 2009 2010 2011 2012 2013 2014
Seed round (median round size in US$m)
During 2014, the median deal size at seed round class stage increased in all markets except for Israel
which saw a marginal decline with median value decreasing from US$0.7m in 2013 to US$0.6m in
2014, suggesting investor sentiment remains positive. VC investors preferred to make bigger
investments in young startups globally.
First round (median round size in US$m)
Investors made larger investments in early stage round classes in 2014, reflected by increased
median round size in all VC markets. China saw the strongest growth of 50% in 2014, compared
to 2013, followed by Canada, which saw 38% growth. While the US and Europe growth rate was
almost 20% each, India and Israel, each showed a marginal growth rate of nearly 10%.
Second round (median round size in US$m)
While the two mature VC markets – US and Europe – saw 8% and 22% increase, respectively in the
median value in 2014, the two emerging economies – China and India – recorded 48% and 35%
increase, respectively, over 2013. This reflects investor preference to make bigger investments in the
emerging markets in anticipation of earning higher returns. The median value, however, declined by
19% and 29% in Canada and Israel respectively.
Later stage (median round size in US$m)
Median deal sizes grew significantly in 2014 compared to 2013, particularly in the smaller VC
markets. The growth was the steepest in Canada, where the median value increased to almost
3.5x during 2014. For India and Israel the median value almost doubled to reach US$20.2m and
US$14.9m in 2014 from US$10.3m and US$8.0m in 2013, respectively.
0.3 0.2 0.3 0.6 0.5 0.5 0.4
340 304 391 638 768 746 455
Amount invested
globally (US$b)
No. of global deals
Amount invested
globally (US$b)
No. of global deals
13.7 7.9 10.0 12.2 10.7 11.1 14.0
2,211 1,685 1,966 2,314 2,392 2,682 2,673
US Europe China Canada Israel (all site) India
11.4 7.6 8.3 10.8 8.3 11.0 16.3
1,084 1,025 1,054 1,062 999 1,240 1,343
22.2 17.5 24.8 28.3 26.2 27.5 48.7
1,476 1,467 1,676 1,647 1,552 1,541 1,728
Updated
Note: Chart scales vary for the purpose of clarity.
Page 12 Venture Capital Insights® – 4Q14
Median round size by stage of development In 2014, median deal size increased for almost all VC markets, across all stages, compared to 2013
7.0
5.0
5.0
5.1
5.0
5.0
5.9
3.0
2.1
2.4
2.1
2.4
1.9
2.5
7.3
7.3
8.6
10
.0
8.0
5.0
10
.0
5.5
3.6
5.0
5.0
3.3
2.5
4.3
6.0
4.4
6.0
9.0
4.8
6.0
7.0
8.0
5.1
6.4
5.5
4.0
4.0
4.3
0
2
4
6
8
10
12
2008 2009 2010 2011 2012 2013 2014
8.0
5.0
6.1
9.1
6.2
5.1
13
.0
3.9
2.9
5.6
3.6
4.0
3.9
5.6
7.0
5.7
6.9
20
.0
18
.5
10
.7
10
.0
NS
7.9
14
.6
NS
NS
7.5
10
.0
9.0
NS
8.5
9.8
7.0
10
.4
7.7
7.2
5.1
5.0
8.0
9.2
36
.0
60
.0
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 2014
Startup (median round size in US$m)
In 2014, the median deal size increased compared to 2013 for all VC markets, except for Canada for
which the median values were did not have enough of a sample size to calculate a median. India and
China saw the highest increase in median values seen in 2014, which were almost triple the size for in
2013, in both countries.
Product development (median round size in US$m)
In the US, the median value rebounded in 2014 to reach 2011 levels after seeing a consistent
decline over the past two previous years. Among other markets, China recorded the highest
growth rate of more than 250% in 2014 compared to 2013. In Europe, Canada and Israel it stood
at 69%, 71% and 12%, respectively. India was the only exception that saw close to an 80%
decline in values for the same period.
Generating revenue (median round size in US$m)
Median deal size increased across all VC markets in 2014 compared to 2013. The increase was most
significant in China and Canada, where median values almost doubled compared to levels of 2013. At
US$10m, the median value in China reached its highest level in six years. This is because majority of
the Chinese companies which received larger/mega investments for the during the year were
operating at generating revenue stage.
Profitable (median round size in US$m)
On the back of large-sized financing deals, the median values in the US and India increased in
2014 compared to 2013, to reach the highest levels ever seen since 2008. The median values
increased even for Europe and Canada 42% and 33%, respectively during the same period.
China and Israel were the only exceptions that saw median values declining by 7% and 26%,
respectively in 2014 over the previous year.
Amount invested
globally (US$b)
No. of global deals
1.1 0.8 0.9 1.1 0.8 0.6 0.5
370 376 358 566 612 532 292
17.5 11.4 13.0 12.3 8.9 8.9 11.6
1,668 1,427 1,580 1,450 1,323 1,287 1,117
Amount invested
globally (US$b)
No. of global deals
27.1 19.8 27.1 36.7 36.6 39.8 65.3
3,035 2,698 3,159 3,701 3,913 4,451 4,822
5.4 3.5 5.6 5.9 3.4 4.1 9.2
416 302 359 316 223 278 274
US Europe China Canada Israel (all site) India
Updated
7.0
5.0
4.0
5.0
3.7
3.3
5.0
2.6
2.1
2.5
1.9
1.3
1.7
2.8
2.7
3.9
5.0
3.0
3.6
0.8
3.0
3.3
4.2
3.0
6.0
2.0
1.5
2.6
4.5
4.0
4.0
4.4
3.2
4.3
4.8
6.3
1.8
8.7
0.4
3.3
2.2
0.5
0123456789
10
2008 2009 2010 2011 2012 2013 2014
1.2
1.0
1.0
1.0
0.9
0.8
1.0
0.9
0.8
0.7
0.7
0.4
0.3
0.7
7.5
1.9
1.4
1.0
0.5
0.6
1.5
NS
1.5
1.4
0.9
0.5
0.3
NS
2.5
1.5
1.2
1.8
0.6
0.9
1.0
NS
NS
6.7
3.0
0.5
0.2
0.6
012345678
2008 2009 2010 2011 2012 2013 2014
Note: Chart scales vary for the purpose of clarity.
Page 13 Venture Capital Insights® – 4Q14
Section 2: Global VC exit landscape – IPO and M&A Analysis by geography
Page 14 Venture Capital Insights® – 4Q14
Section 2: Global VC exit landscape – IPO and M&A Summary
Global VC-backed IPOs
► 2014 saw increased IPO activity across all VC markets compared to 2013. In Europe and China, deal volume grew to
3x and 4x of levels seen in the previous year, respectively; the US recorded a growth of 42% for the same period.
► In 2014, Canada and Israel saw the highest number of IPOs since 2008, while India did not see any change in IPO
deal volume.
► The US continued to dominate in terms of dollar amount raised via IPO, followed by China in 2014.
► Europe recorded the strongest growth in IPO proceeds more than 600% driven by the IPO exit of Rocket Internet AG,
which raised US$1.8b in the last quarter of 2014.
► The smaller VC markets also gained momentum during 2014, with Canada and Israel seeing their highest levels of IPO
proceeds in the last six years.
Global VC-backed M&As
► The US and Europe continued to see a high numbers of M&A deals in 2014, when compared to 2013, while the number
of deals increased by 19% in Europe, the US saw a marginal increase of 8% during 2014.
► For other markets, including China, the number of M&A deals either declined or remained at the similar level compared
to the last year. For China, despite a 17% decline in 2014, M&A deal volume during current year was much higher than
the yearly totals of 2008–2012 period.
► For the two key VC markets – US and China – the amount raised through VC-backed M&A exits was at its all-time high
in 2014 since 2008. Strong M&A activity in the US was lifted by a megadeal with WhatsApp Inc. being acquired by
Facebook Inc., resulting in a post M&A valuation of almost US$20.0b. Deals based in the software sector lead to 200%
increase in China in 2014 compared to the previous year.
Page 15 Venture Capital Insights® – 4Q14
29
NS
NS
105
NS
2
233
158
NS
532
46
20
11 9
1
NS
7 4
2
24
NS
156
504
2008 2009 2010 2011 2012 2013 2014
Canada India Israel
Amount raised through IPO exits (US$m)
In 2014, the US maintained its lead in terms of dollar amount raised via IPO, followed by China. However, Europe recorded the strongest growth in terms IPO proceeds of more
than 600% due to the IPO exit of Rocket Internet AG which raised US$1.8b in the last quarter of 2014. The smaller VC markets also gained momentum during 2014, with Canada
and Israel recording the highest levels of IPO proceeds in the last six years. After a slow activity in the past few years, IPO activity picked up in India during the current year
proceeds grew to US$91m in 2014 from US$11m In 2013 and US$20m recorded in 2012.
Global VC-backed IPO IPO activity grew across markets in 2014 with Europe recording the strongest growth compared to the previous year
562
904
3,1
93
5,2
83 11,2
04
8,2
16
9,2
39
36
170
564
996
494
669 4,7
95
633 4,4
48
21,9
61
15,7
35
4,7
37
1,9
80
7,1
64
2008 2009 2010 2011 2012 2013 2014
US Europe China
2
0 1 1
1 1
4
2
0
6
2 2
1
2
0
2 2 2
0
2
7
2008 2009 2010 2011 2012 2013 2014
Canada India Israel
8 8
47 46 50
74
105
12
3 18 16 16
18 55
12
45
141
100
48
15
61
2008 2009 2010 2011 2012 2013 2014
US Europe China
During 2014, IPO activity remained strong in the three key VC markets – the US, Europe and China – supported by improved economic conditions, better investment returns and
high investor confidence levels. In Europe and China, deal volume grew to 3x and 4x of levels seen in 2013, respectively and the US recorded a growth of 42% for the same
period. Canada and Israel recorded the highest number of IPO deals in 2014 since 2008, while India did not see any real change in IPO deal volume.
Number of IPO exits
Note: Chart scales vary for the purpose of clarity.
Page 16 Venture Capital Insights® – 4Q14
2,3
09
1,1
30
1,3
56
2,3
37
2,9
44
2,6
88
579
44
167
1,1
58
255
442
780
995
1,3
33
683
1,0
02
827
907 1
,561
963
2008 2009 2010 2011 2012 2013 2014
Canada India Israel
For the two key VC markets – US and China – the amount raised through VC-backed M&A exits was at its all-time high in 2014. A strong M&A activity in the US was driven by a
megadeal of WhatsApp Inc., which was acquired by Facebook Inc., with a post M&A valuation of almost US$20.0b, while software sector-based deals drove close a 200%
increase in China in 2014 compared to the previous year. India saw an increase of 28% on the back of increased activity in the consumer services and information
technology sectors.
Global VC-backed M&A Amount raised through VC-backed M&A exits hits its record high since 2008 in 2014 for US and China, since 2008
25,1
89
21,2
21
38,2
27
47,3
59
42,3
58
41,3
04 7
9,7
52
10,6
74
6,3
50
8,1
25
11,3
17
5,9
75
14,0
29
10,6
85
586
638
869
699
281
2,1
05
6,4
84
2008 2009 2010 2011 2012 2013 2014
US Europe China
30 29
35
23
30 28
22
2 6
17
6
17
16 17
24 18
21
18 19
13 11
2008 2009 2010 2011 2012 2013 2014
Canada India Israel
427 409
563 552
473 449
483
224 193 208 203
156 152 181
8 15 18 10 11 23 19
2008 2009 2010 2011 2012 2013 2014
US Europe China
The US and Europe continued to see a higher number of M&A deals in 2014, across VC markets. Compared to 2013, while the number of deals increased by 19% in Europe, the
US saw a marginal increase of 8% during 2014. For other markets, including China, the number of M&A deals either declined or remained at the similar level as seen in the
previous year. For China, despite a 17% decline during current year, M&A deal volume in 2014 was much higher than the yearly totals of 2008–2012 period.
Number of M&A exits
Updated
Amount raised through M&A exits (US$m)
Note: Chart scales vary for the purpose of clarity.
Page 17 Venture Capital Insights® – 4Q14
Appendix
Page 18 Venture Capital Insights® – 4Q14
Sector classification
Sector Sub-sector
Business and financial services
Business support services
Construction and civil engineering
Financial institutions and services
Wholesale trade and shipping
Consumer goods
Food and beverage
Household and office goods
Personal goods
Vehicles and parts
Consumer services
Consumer information services
Media and content
Retailers
Travel and leisure
Energy and utilities
Non-renewable energy
Renewable energy
Utilities
Healthcare
Biopharmaceuticals
Healthcare services
Medical devices and equipment
Medical software and information services
Industrial goods and materials
Aerospace and defense
Agriculture and forestry
Machinery and industrial goods
Materials and chemicals
Information technology
Communications and networking
Electronics and computer hardware
Semiconductors
Software
Page 19 Venture Capital Insights® – 4Q14
EY’s global venture capital advisory group leadership network
Operations Sandra Feldner Vandergriff +1 213 977 3253 [email protected]
EMEIA Demet Ozdemir +90 212 408 5405 [email protected]
Asia-Pacific Ringo Choi +86 755 2502 8298 [email protected]
Greater China Lawrence Lau +862 1222 82816 [email protected]
France and Luxembourg Franck Sebag +33 1 46 93 73 76 [email protected]
Global Leader Bryan Pearce +1 617 585 0499 [email protected]
Global SGM Leader Maria Pinelli +44 20 7980 0960 [email protected]
India Mayank Rastogi +91 22 6192 0850 [email protected]
Israel Oren Bar-On +97 2 3568 7102 [email protected]
US Leader Jeff Grabow +1 408 947 5607 [email protected]
EY | Assurance | Tax | Transactions | Advisory
About EY
EY is a global leader in assurance, tax, transaction and
advisory services. The insights and quality services we
deliver help build trust and confidence in the capital
markets and in economies the world over. We develop
outstanding leaders who team to deliver on our
promises to all of our stakeholders. In so doing, we play
a critical role in building a better working world for our
people, for our clients and for our communities.
EY refers to the global organization, and may refer to
one or more, of the member firms of Ernst & Young
Global Limited, each of which is a separate legal entity.
Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For more
information about our organization, please visit ey.com.
About EY’s Strategic Growth Markets Network
EY’s worldwide Strategic Growth Markets Network is dedicated to
serving the changing needs of high-growth companies. For more
than 30 years, we’ve helped many of the world’s most dynamic and
ambitious companies grow into market leaders. Whether working
with international, mid-cap companies or early stage, venture-backed
businesses, our professionals draw upon their extensive experience,
insight and global resources to help your business succeed.
ey.com/sgm
© 2015 EYGM Limited.
All Rights Reserved.
EYG no: CY0832
1501-1393228
ED None
This material has been prepared for general informational purposes
only and is not intended to be relied upon as accounting, tax, or other
professional advice. Please refer to your advisors for specific advice.
ey.com
All data contained in this is sourced to Dow Jones VentureSource
unless otherwise noted.
![VENTURE CAPITAL FOR SUSTAINABILITY 2007 REPORT [2007] Venture Capital... · growing sector as Venture Capital for Sustainability ... Venture Capitalists’ stake in ... Venture Capital](https://img.pdfslide.us/doc/110x75/5a7926b77f8b9a00168dc540/venture-capital-for-sustainability-2007-2007-venture-capitalgrowing-sector.jpg)
