V E N T U R E C A P I T A L R E P O R T
Venture Capital Report U.S. | 3Q | 2018
V E N T U R E C A P I T A L R E P O R T
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 3Q 2018 include:
• U.S. venture capital fundraising decreased during 3Q 2018, both in terms of funds raised and number of closings, but the level of activity is still
considerable when compared with the same quarter last year.
• Venture capital investment in U.S. companies hit an all-time record, eclipsing the dot-com bubble peak by 17%.
• Both the number of IPOs and M&A deal values decreased compared to the previous quarter.
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V E N T U R E C A P I T A L R E P O R T
VENTURE FUNDRAISING DECREASES IN U.S. DURING 3Q 2018
3
FUNDRAISING
U.S. VC Fundraising (2015–2018) Based on multiple closings
148 venture capital funds collected $12.81 billion in 3Q
2018, which represents a 27% decrease in the amount
raised from the prior quarter and a 9% drop in the number
of funds.
Insight Venture Partners X LP, a venture capital fund that
closed at $6.3 billion, was the largest of 3Q 2018, raising
$2.69 billion in its final closing, which accounted for 21% of
the total VC financing raised during the quarter.
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Amount Raised ($B) $5.76 $9.15 $14.35 $11.91 $8.79 $9.58 $8.20 $14.38 $9.85 $5.65 $9.00 $17.61 $12.81
Number of Funds 78 104 131 119 117 149 174 160 120 142 148 162 148
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120
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200
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$4.00
$8.00
$12.00
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V E N T U R E C A P I T A L R E P O R T
LARGEST VC FUND CLOSINGS IN 3Q 2018
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FUNDRAISING
Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type
Insight Venture Partners Insight Venture Partners X
LP $2,689.79 New York NY Closed Multi-stage
venture capital Venture Capital Final
Lightspeed Venture Partners Lightspeed Venture Partners Select III LP $1,050.00 Menlo Park CA Closed
Late-stage venture capital
Venture Capital Final
Foundry Group LLC Foundry Group Next 2018
LP $750.00 Boulder CO Closed Multi-stage
venture capital Venture Capital Final
Lead Edge Capital Management LLC Lead Edge Capital IV LP $520.00 New York NY Closed
Multi-stage venture capital
Venture Capital Final
Ribbit Capital LP Ribbit Capital V LP $420.00 Palo Alto CA Closed Early-stage
venture capital Venture Capital Final
V E N T U R E C A P I T A L R E P O R T
U.S. EQUITY INVESTMENT HITS ALL-TIME RECORD
Investment in U.S. companies surged 14% in 3Q 2018 from
the previous quarter, hitting a new record for the second
consecutive quarter. Total funding now exceeds the peak
of the first dot-com bubble (1Q 2000) by 17%, although the
number of deals is 26% lower compared to that era. Deal
volume also fell on a quarter-over-quarter basis, dropping
8%. Median deal sizes actually decreased 14% from 2Q,
indicating that the jump in total funding was concentrated
in a handful of extremely large rounds. When compared to
last quarter, financing rose most noticeably in the
Business & Financial Services, Consumer Goods, and
Consumer Services sectors; IT and Healthcare fell slightly.
5
FINANCING
Equity Financings in U.S.- Based, VC-Backed Companies (2015–2018)
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Amount Raised ($B) $23.18 $23.78 $16.33 $19.34 $19.62 $14.20 $19.49 $21.48 $23.59 $21.87 $26.87 $27.61 $31.53
Number of Deals 1308 1376 1289 1293 1349 1206 1396 1433 1376 1293 1476 1498 1377
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V E N T U R E C A P I T A L R E P O R T
Number of Deals
EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)
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FINANCING
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Seed 108 133 117 89 120 107 145 165 150 147 147 181 155
First 384 385 348 361 366 333 337 342 274 266 315 361 282
Second 217 234 225 233 209 189 219 201 223 179 228 221 198
Later 429 432 422 415 453 379 442 402 419 406 473 438 424
Restart 3 2 4 4 3 1 6 1 4 0 2 0 4
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V E N T U R E C A P I T A L R E P O R T
Amount Raised ($B)
EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)
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FINANCING
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Seed $126.79 $177.54 $193.61 $154.44 $163.40 $202.78 $268.47 $417.22 $347.13 $396.55 $426.15 $525.26 $488.11
First $2,855.07
$3,054.11
$2,201.90
$2,367.45
$3,179.11 $2,168.84
$3,447.97
$3,234.87
$2,263.94
$3,521.95
$4,237.95
$3,686.23
$4,033.39
Second $3,213.75
$3,253.10
$2,233.95
$2,710.18
$2,445.16
$2,053.20
$4,102.88
$3,097.33
$3,676.54
$3,132.03
$4,868.66
$3,615.65
$5,288.29
Later $14,938.4
$16,174.8
$10,158.8
$9,575.36
$11,646.1 $7,772.16
$10,083.9
$12,670.2
$14,512.1 $12,788.2
$14,859.8
$16,959.3
$16,886.3
Restart $55.49 $16.20 $61.84 $41.80 $543.60 $11.00 $82.85 $11.00 $40.58 $0.00 $29.60 $0.00 $35.10
$0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
$16,000.00
$18,000.00
V E N T U R E C A P I T A L R E P O R T
EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE (2015–2018)
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FINANCING Median Equity Deal Size ($M)
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Median Equity Deal Size ($M) $5.00 $5.00 $4.40 $4.21 $4.50 $4.70 $5.00 $5.22 $5.03 $5.76 $6.00 $7.00 $6.00
$0.00
$1.00
$2.00
$3.00
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$8.00
V E N T U R E C A P I T A L R E P O R T
EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2018)
Business & Financial Services companies (which includes SaaS) received the
lion’s share of funding in 3Q, taking $7.55 billion across 299 deals. The amount
invested was up 21% over the previous four-quarter average, while the number of
deals fell 9%.
The IT sector dropped to second place, with $7.20 billion in 410 rounds. This
represented an increase of 25% in funding but a 5% dip in deal volume compared
to the previous four-quarter average.
Healthcare companies placed a strong third, securing $6.90 billion through 291
deals. These figures were up 7% and 3% in total funding and deal volume,
respectively, compared to the previous four-quarter average.
For the year to date, Healthcare is in the lead so far, with a total of $21.30 billion
raised across 870 transactions.
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FINANCING 3Q 2018 Industry Breakdown By Number of Deals
3Q 2018 Industry Breakdown By Amount Raised ($B)
299
85
204
22 291
58
410
Business & Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
24%
8%
19% 1%
22%
3%
23%
Business & Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
V E N T U R E C A P I T A L R E P O R T
TOP DEALS FOR VC-BACKED COMPANIES (3Q 2018)
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FINANCING
Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)
Lucid Motors Inc. Newark,
CA Power Supplies
Electronics & Computer Hardware
Information Technology
Provider of energy and electric drive (EV)
solutions for electric vehicle applications.
9/17/2018 Other Equity 1000.00 Saudi Arabia Public Investment Fund
NewTV Los Angeles,
CA Broadcasting Media & Content
Consumer Services
Developer of series with short, Youtube-
length episodes. 8/7/2018 VC 1st 1000.00
Warner Media LLC, Walt Disney Co., Viacom, Sony, NBC Universal Inc., Metro-Goldwyn-Mayer Studios Inc., Madrone Capital Partners*, Lionsgate Entertainment, Liberty Global,
JPMorgan Chase & Co., ITV, Goldman Sachs Group Inc., Entertainment One Ltd., Alibaba Capital Partners, 21st Century
Fox Inc.
JUUL Labs Inc. San Francisco,
CA Sports/Leisure
Goods Personal Goods
Consumer Goods
Provider of electronic cigarettes.
7/10/2018 VC 2nd 650.00 Tiger Global Management LLC*
Peloton Interactive Inc.
New York, NY
Sports/Leisure Goods
Personal Goods Consumer
Goods
Provider of an interactive stationary
exercise bike. 8/2/2018 VC 6th 550.00
Tiger Global Management LLC, Technology Crossover Ventures*, GGV Capital
Ambatana Inc. New York,
NY Shopping
Facilitators Consumer
Information Services Consumer Services
Provider of a mobile application to buy and
sell used goods locally.
8/8/2018 VC 4th 500.00 Naspers Ventures*
V E N T U R E C A P I T A L R E P O R T
TOP DEALS FOR VC-BACKED COMPANIES (3Q 2018)
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FINANCING
Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)
Uber Technologies Inc.
San Francisco, CA
Transportation Services
Travel & Leisure Consumer Services
Provider of an on-demand ridesharing
and food delivery service.
8/27/2018 Corporate
Equity 500.00 Toyota Motor Corp.*
Zoox Inc. Foster City,
CA Automobiles Vehicles & Parts
Consumer Goods
Developer of self-driving cars.
7/17/2018 VC 2nd 500.00 Primavera Capital Group*, Mike Cannon-Brookes*, Lux Capital
Management LLC, Draper Fisher Jurvetson, Blackbird Ventures
Samumed LLC San Diego,
CA Biotechnology Therapeutics
Biopharmaceuticals Healthcare
Developer of therapeutics for
tissue-level regeneration.
8/6/2018 VC 2nd 438.00 Vickers Venture Partners, Starling Ventures LLC
V E N T U R E C A P I T A L R E P O R T
MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (3Q 2018)
1 2
FINANCING
31
25
19 19
17 17
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Alumni Ventures Group Y Combinator GV New Enterprise Associates
Andreessen Horowitz Sequoia Capital
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (3Q 2018)
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FINANCING Number of Deals in 3Q 2018 by Primary Region
Amount Raised ($B) in 3Q 2018 by Primary Region
Number of Deals by Primary Region 3Q 2018 296
35
102
77
120
438
55
59
77
111
Mid-Atlantic Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Amount Raised ($B) by Primary Region 3Q 2018 $6.32
$0.45
$1.04
$1.07
$2.65
$14.28
$0.80
$0.57
$0.89
$3.38
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY METRO REGION (3Q 2018)
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FINANCING
Number of Deals by Metro Region 3Q 2018
Amount Raised ($B) by Metro Region 3Q 2018
Austin 29 $0.29
Boston 109 $2.61
Chicago 33 $0.46 Dallas-Fort Worth 12 $0.07
Los Angeles 66 $2.14
New York 199 $5.36
Orange County 15 $0.25
Potomac 38 $0.61
San Diego 24 $0.89
San Francisco Bay Area 434 $14.21
Seattle 44 $0.68
Metro Region Breakout Number of Deals
Metro Region Breakout Amount Raised ($B)
12
15
24
29
33
38
44
66
109
199
434
Dallas-Fort Worth
Orange County
San Diego
Austin
Chicago
Potomac
Seattle
Los Angeles
Boston
New York
San Francisco Bay Area
Number of Deals by Metro Region
$0.07
$0.25
$0.29
$0.46
$0.61
$0.68
$0.89
$2.14
$2.61
$5.36
$14.21
Dallas-Fort Worth
Orange County
Austin
Chicago
Potomac
Seattle
San Diego
Los Angeles
Boston
New York
San Francisco Bay Area
Amount Raised ($B) by Metro Region
V E N T U R E C A P I T A L R E P O R T
VENTURE M&A AND IPO MARKET ACTIVITY IN THE U.S. DURING 3Q 2018
In 3Q 2018, deal values for mergers and acquisitions of
VC-backed companies declined by 12% when
compared with the previous quarter.
During the same period, the number of IPOs declined
by 32% to a total of 21 listings for venture-backed
companies. While this represents a significant
decrease when compared with 2Q 2018’s record
quarter, it still comes in 163% higher than the number
of listings in 3Q 2017. Capital raised decreased by 53%
from 2Q, reaching $2.26 billion.
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LIQUIDITY
Exit Opportunities for U.S. VC–Backed Companies (2015–2018)
0 50 100 150 200 250
3Q'15
4Q'15
1Q'16
2Q'16
3Q'16
4Q'16
1Q'17
2Q'17
3Q'17
4Q'17
1Q'18
2Q'18
3Q'18
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
IPOs 14 16 6 11 13 8 7 20 8 25 16 31 21
M&As 174 164 148 162 162 148 165 170 182 186 182 190 202
V E N T U R E C A P I T A L R E P O R T
U.S. VC-BACKED M&As (2015-2018)
202 M&As of venture-backed companies in the U.S.
collected $33.02 billion during 3Q 2018.
• Compared to 2Q 2018, when a total of 190
transactions accumulated $37.48 billion, the
number of deals increased by 6% while amount
raised decreased by 12%.
• The largest deal of the quarter was
Cisco Systems’s acquisition of Duo Security Inc. for
$2.35 billion, announced on August 2. The deal
accounted for approx. 7% of the total amount paid
in 3Q 2018 for M&As.
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LIQUIDITY
U.S. VC-Backed M&A Activity (2015 - 2018)
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Amount Paid ($B) $27.37 $26.96 $23.10 $23.59 $26.40 $18.39 $20.22 $21.18 $21.80 $27.10 $32.00 $37.48 $33.02
Number of M&As 174 164 148 162 162 148 165 170 182 186 182 190 202
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V E N T U R E C A P I T A L R E P O R T
TOP 3 U.S. M&As (3Q 2018)
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LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M)
Acquirer
Duo Security Inc.* Ann Arbor, MI Provider of two-factor
authentication services.
Network / Systems Management
Software Software
Information Technology 8/2/2018 Acquisition $2,350.00
Cisco Systems (Nasdaq: CSCO)
Datorama Inc. New York, NY
Provider of a software-as-a-service (SaaS) based big data management
platform for advertisers.
Advertising / Marketing
Business Support Services
Business and Financial Services 7/16/2018 Acquisition $800.00
Salesforce.com (NYSE: CRM)
Mendix Inc.* Boston,
MA
Provider of platform-as-a-service (PaaS) back-
end integration services.
Business Applications Software Software
Information Technology 8/1/2018 Acquisition $730.00
Siemens AG (ETR: SIE)
*Deal pending regulatory approval
V E N T U R E C A P I T A L R E P O R T
U.S. VC-BACKED IPOs (2015-2018)
21 venture-backed companies raised $2.26 billion through public
offerings in 3Q 2018.
• Both the number of deals and the capital raised dropped
significantly from last quarter.
• Tenable Holdings Inc.’s IPO was the biggest listing, raising
$250.70 million. The company, now quoted on the Nasdaq
Stock Exchange under the TENB ticker symbol, was valued at
$2.55 billion.
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LIQUIDITY
U.S. VC-Backed IPO Activity (2015 - 2018)
3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18
Raised ($B) through IPO $1.63 $1.36 $0.38 $0.79 $0.99 $0.69 $3.95 $2.04 $0.62 $2.65 $1.75 $4.78 $2.26
Number of IPOs 14 16 6 11 13 8 7 20 8 25 16 31 21
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TOP 3 U.S. IPOs (3Q 2018)
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LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date
Round Type
Raised through IPO ($M) Exchange
Tenable Holdings Inc.
Columbia, MD
Provider of cyber security solutions.
Network / Systems Management
Software Software
Information Technology 7/26/2018 IPO $250.70
NASDAQ: TENB
Eventbrite Inc. San Francisco,
CA
Provider of online event management and ticketing
services. Shopping Facilitators
Consumer Information Services
Consumer Services 9/20/2018 IPO $230.00
NYSE: EB
Sonos Inc. Santa Barbara,
CA Provider of wireless speakers. Consumer Electronics
Electronics and Computer Hardware
Information Technology 8/2/2018 IPO $83.33
NASDAQ: SONO
V E N T U R E C A P I T A L R E P O R T
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The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource.
This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital
statistics cover institutional equity investments in early stage, innovative companies and do not include companies receiving funding solely from
corporate, individual, and/or government investors. Figures contained throughout the report are current at the time of publication but are subject to
change without notice.
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V E N T U R E C A P I T A L R E P O R T
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