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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 Capital Report U.S. | 4Q | 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 investment, fundraising, and liquidity. The included
charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 4Q 2018 include:
• A long-building tsunami of VC cash crested in 4Q, obliterating all quarterly and annual records for equity investment.
• VC fundraising surged again with the fourth-largest quarter on record, helping to end 2018 with the biggest annual haul in 18 years.
• The M&A market had its second-best quarter on record, catapulting 2018 as the top year ever for both the number of M&A transactions and the
amounts paid.
• VC-backed companies going public had a more mixed quarter, but ended 2018 as the best year for IPOs since 2014.
• The San Francisco Bay area took 61% of all capital invested into U.S. companies in 4Q, by far the most extreme regional concentration ever seen.
(The Bay Area average dating back to 1992 is 33%.)
2
V E N T U R E C A P I T A L R E P O R T
UNPRECEDENTED QUARTER AND YEAR BREAKS RECORDS FOR U.S. EQUITY INVESTMENT
In a year when every single quarter set a new all-time
record for equity investment, the final quarter managed to
leap 33% above 3Q’s already staggering figure for capital
raised. Altria Group’s $12.8 billion financing for Juul Labs
Inc. played a critical role in this, comprising nearly 30% of
4Q’s total. Indeed, the Juul deal ranks as the largest equity
round in a VC-backed company ever.
Although the number of rounds dipped 14% since 2Q’s
high-water mark (the most active quarter since 2Q 2000), a
relatively small number of mega deals pushed the
investment totals to ever-increasing heights.
2018 ended the year with $130.39 billion in all, a 50%
increase from the previous year, and breaking the record
set in 2000 during the dot-com bubble.
3
FINANCING
Equity Financings in U.S.-Based, VC-Backed Companies (2015–2018)
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Amount Raised ($B) $23.67 $16.48 $19.36 $19.76 $14.21 $19.66 $21.46 $23.82 $22.10 $27.03 $28.13 $32.22 $43.01
Number of Deals 1397 1316 1319 1378 1246 1436 1462 1434 1336 1534 1555 1451 1343
0
200
400
600
800
1000
1200
1400
1600
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
V E N T U R E C A P I T A L R E P O R T
TOP ROUNDS FOR VC-BACKED COMPANIES (4Q 2018)
4
FINANCING
Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)
Juul Labs Inc. San Francisco,
CA Consumer Electronics
Electronics & Computer Hardware
Information Technology
Provider of nicotine vaporizers with
temperature control. 12/20/2018
Corporate Equity
$12,800.00 Altria Group Inc.*
Epic Games Inc. Cary, NC Entertainment Consumer
Information Services
Consumer Services
Provider of various video games.
10/26/2018 Growth Equity
$1,250.00 Vulcan Capital, Smash Ventures, Lightspeed Venture
Partners, Kohlberg Kravis Roberts & Co. LP*, Kleiner Perkins Caufield & Byers, Iconiq Capital LLC, aXiomatic
View Inc. Milpitas, CA
Building Materials/
Construction Machinery
Machinery and Industrial Goods
Industrial Goods and Materials
Manufacturer of large-scale architectural
glass. 11/2/2018 VC Later $1,100.00 SoftBank Vision Fund*
Maplebear Inc. (DBA Instacart)
San Francisco, CA
Shopping Facilitators
Consumer Information
Services
Consumer Services
Operator of a local grocery shopping application and delivery service.
10/16/2018 Other Equity
$871.00 Valiant Capital Management LP, Tiger Global Management
LLC, D1 Capital Partners*, Coatue Management LLC
Cambridge Mobile Telematics Inc.
Cambridge, MA Communications
Software Software
Information Technology
Provider of mobile telematics and
analytics for usage- and behavior-based
programs for road and driver safety.
12/19/2018 VC 1st $500.00 SoftBank Vision Fund*
V E N T U R E C A P I T A L R E P O R T
INFORMATION TECHNOLOGY TAKES THE LION’S SHARE OF INVESTMENT IN 4Q
Information Technology companies received the largest share of equity deals
and dollars for both 4Q and 2018 as a whole. This marks the first year since 2014
that IT held the lead among industry groups. The $12.8 billion corporate equity
deal for Juul Labs, in the consumer electronics sector, represented 61% of the
quarter’s total for IT.
Companies in the Consumer Services group were in second place for 4Q in terms
of capital raised, securing $6.42 billion in 205 deals. The top deal in this space
was a $1.25 billion growth equity round for Epic Games, a video game provider.
Business and Financial Services companies placed a strong third, securing $5.9
billion through 294 rounds. Snowflake Computing, a provider of cloud-based data
warehousing services, won the largest financing in this sector with a $450 million
Series F deal.
5
FINANCING 4Q 2018 Industry Breakdown By Number of Deals
4Q 2018 Industry Breakdown By Amount Raised ($B)
294
86
205
19 248
55
428
Business & Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
14%
3%
15%
1%
13% 5%
49%
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
MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (4Q 2018)
6
FINANCING
28
22
20 20 19
17 16
15
13 12
0
5
10
15
20
25
30
Y Combinator Keiretsu Forum Alumni Ventures Group Sequoia Capital New Enterprise Associates
Andreessen Horowitz Lightspeed Venture Partners
Initialized Capital GV Battery Ventures
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 (4Q 2018)
7
FINANCING
Metro Region Breakout Number of Deals
Metro Region Breakout Amount Raised ($B)
11
20
26
29
35
36
36
75
112
168
413
Dallas-Fort Worth
Orange County
Austin
San Diego
Potomac
Chicago
Seattle
Los Angeles
Boston
New York
San Francisco Bay Area
Number of Deals by Metro Region
$0.12
$0.20
$0.31
$0.42
$0.57
$0.69
$0.77
$1.77
$2.87
$3.23
$26.13
Dallas-Fort Worth
Austin
Seattle
Orange County
Chicago
Potomac
San Diego
Los Angeles
New York
Boston
San Francisco Bay Area
Amount Raised ($B) by Metro Region
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (4Q 2018)
8
FINANCING Number of Deals in 4Q 2018 by Primary Region
Amount Raised ($B) in 4Q 2018 by Primary Region
Number of Deals by Primary Region 4Q 2018 260
29
106
75
127
419
51
50
90
127
Mid-Atlantic Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Amount Raised ($B) by Primary Region 4Q 2018 $4.26
$0.45
$1.05
$0.93
$3.33
$26.18
$0.51
$0.47
$2.68
$3.05
10% 1% 3% 2%
8%
61%
1% 1%
6% 7% Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
19%
2%
8%
6%
9% 31%
4%
4%
7%
10% Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
V E N T U R E C A P I T A L R E P O R T
MEDIAN DEAL SIZE FOR EQUITY FINANCINGS IN U.S. COMPANIES
9
FINANCING Median Equity Deal Size ($M)
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Median Equity Deal Size ($M) $5.00 $4.29 $4.02 $4.48 $4.47 $4.78 $5.00 $5.00 $5.50 $5.50 $6.50 $6.00 $6.93
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
V E N T U R E C A P I T A L R E P O R T
Number of Deals
COUNT OF EQUITY FINANCINGS IN U.S. COMPANIES, BY ROUND CLASS
1 0
FINANCING
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Seed 139 123 92 122 119 147 168 160 155 163 191 169 125
First 388 353 369 376 340 342 359 289 275 326 376 293 317
Second 233 224 238 210 194 230 205 228 183 233 227 215 164
Later 435 425 411 457 377 443 401 418 404 475 447 441 412
Restart 3 4 4 3 1 6 2 4 0 2 0 4 0
0
50
100
150
200
250
300
350
400
450
500
V E N T U R E C A P I T A L R E P O R T
Amount Raised ($B)
AMOUNT RAISED IN U.S. COMPANIES, BY ROUND CLASS
1 1
FINANCING
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Seed $0.18 $0.20 $0.16 $0.17 $0.22 $0.28 $0.40 $0.37 $0.41 $0.44 $0.53 $0.54 $0.45
First $3.06 $2.24 $2.40 $3.23 $2.22 $3.46 $3.34 $2.23 $3.56 $4.35 $3.92 $4.86 $4.64
Second $3.26 $2.22 $2.82 $2.45 $2.09 $4.18 $3.07 $3.88 $3.15 $4.84 $3.57 $4.93 $3.25
Later $15.99 $10.22 $9.43 $11.66 $7.58 $10.09 $12.55 $14.48 $12.86 $15.00 $17.14 $17.36 $17.76
Restart $0.05 $0.06 $0.04 $0.54 $0.01 $0.08 $0.06 $0.04 $0.00 $0.03 $0.00 $0.04 $0.00
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
V E N T U R E C A P I T A L R E P O R T
U.S. VENTURE CAPITAL FUNDS SEIZE LARGEST ANNUAL HAUL SINCE 2000
1 2
FUNDRAISING
U.S. VC Fundraising (2015–2018) Based on multiple closings
U.S. VCs ended 2018 with the 4th largest fundraising frenzy
on record, raising $16.71 billion across 128 fund closings.
Together with the even more impressive second quarter’s
haul (the biggest since 4Q 2000), this ranked as the best
year for US fundraising in 18 years.
The total number of VC fund closings in 2018 was down
slightly from 2017’s record-setting 601 funds, but its 586
figure was more than enough to catapult the year to 2nd
place.
The top fund of the quarter was New York-based Tiger
Global Private Investment Partners XI LP, securing $3.75
billion in its final close. 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Amount Raised ($B) $9.81 $14.35 $11.91 $8.94 $9.73 $8.20 $14.39 $9.88 $5.65 $9.00 $17.62 $11.13 $16.71
Number of Funds 107 132 119 119 149 175 161 121 144 147 163 148 128
0
40
80
120
160
200
$-
$4.00
$8.00
$12.00
$16.00
$20.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC FUND CLOSINGS IN 4Q 2018
1 3
FUNDRAISING
Firm Name Fund Name Amount
($M) Closed in 4Q
Location Offering Status Fund Type Closing Type
Tiger Global Management LLC Tiger Global Private
Investment Partners XI LP $3,750.00 New York, NY Closed Multi-Stage
Venture Capital Final
Bessemer Venture Partners Bessemer Venture
Partners X LP $1,850.00 Menlo Park, CA Closed Multi-Stage
Venture Capital Final
GGV Capital GGV Capital VII LP $1,090.00 Menlo Park, CA Closed Late-Stage
Venture Capital Final
Thrive Capital Thrive Capital Partners VI
LP $1,000.00 New York, NY Closed Multi-Stage
Venture Capital Final
Vivo Capital Vivo Capital Fund IX LP $863.98 Palo Alto, CA Open Multi-Stage
Venture Capital First
V E N T U R E C A P I T A L R E P O R T
U.S. LIQUIDITY CONTINUES STRONG STREAK INTO 4Q, CAPPING MOST ACTIVE YEAR EVER
The number of liquidity events remained historically
high in 4Q, contributing to a year that turned out to be
the strongest on record with 870 exits. The quarter’s
220 M&As and IPOs, though down a hair from 3Q, was
still the third-largest number of exits ever on a
quarterly basis.
As has been the case for many years, the M&A market
was chiefly responsible for this powerful surge in
liquidity. By contrast, the IPO market has been in a
cooling trend for the past two quarters. Even so, 2018
saw the most IPOs of VC-backed companies in four
years.
1 4
LIQUIDITY
Exit Opportunities for U.S. VC–Backed Companies (2015–2018)
0 50 100 150 200 250
4Q'15
1Q'16
2Q'16
3Q'16
4Q'16
1Q'17
2Q'17
3Q'17
4Q'17
1Q'18
2Q'18
3Q'18
4Q'18
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
IPOs 16 6 11 13 8 7 20 8 25 16 31 22 17
M&As 165 149 163 162 150 167 170 182 188 184 190 207 203
V E N T U R E C A P I T A L R E P O R T
SURGE OF ACQUISITIONS IN 4Q ENDS RECORD-BREAKING YEAR FOR U.S. M&A
The M&A market enjoyed its second-best quarter on
record, with $39.84 billion paid for VC-backed
companies, the largest such figure since 4Q 2014. The
strong quarter capped a year which saw a total of
$146.27 billion invested in M&A, the highest annual total
ever.
The largest deal of the quarter was
SAP’s acquisition of Qualtrics International Inc. for $8
billion, announced on November 11. The deal
accounted for around 20% of 4Q’s total.
1 5
LIQUIDITY
U.S. VC-Backed M&A Activity (2015–2018)
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Amount Paid ($B) $28.05 $23.82 $24.65 $26.55 $19.18 $20.04 $20.84 $21.66 $26.82 $33.00 $38.93 $34.45 $39.84
Number of M&As 165 149 163 162 150 167 170 182 188 184 190 207 203
0
50
100
150
200
250
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC-BACKED M&As IN 4Q
1 6
LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M) Acquirer
Qualtrics International Inc.* Provo, UT
Provider of enterprise data collection and analysis
products.
Data Management Services
Business Support Services
Business and Financial Services 11/11/2018 Acquisition $8,000.00
SAP SE (NYSE: SAP)
Cylance Inc.* Irvine, CA Provider of cyber security
products and services.
Network / Systems Management
Software Software
Information Technology 11/16/2018 Acquisition $1,400.00
Blackberry Ltd. (NYSE: BB)
PlanGrid Inc. San Francisco,
CA
Provider of a blueprint application for the
construction industry.
Project / Document Collaboration
Business Support Services
Business and Financial Services 11/20/2018 Acquisition $875.00
Autodesk Inc. (NASDAQ: ADSK)
Wrike Inc. San Jose, CA Provider of social project
management and collaboration software.
Business Applications Software Software
Information Technology 11/29/2018 Buyout $800.00
Vista Equity Partners Management LLC
(San Francisco, CA)
PharmaCann LLC* Oak Park, IL Producer and distributor
of medical cannabis. Crop Cultivation /
Horticulture Agriculture and
Forestry Industrial Goods
and Materials 12/24/2018 Acquisition $682.00 MedMen Enterprises
Inc. (CSE: MMEN)
*Deal pending regulatory approval
V E N T U R E C A P I T A L R E P O R T
MIXED PICTURE FOR U.S. IPOs IN 4Q, BUT STRONGEST YEAR OVERALL SINCE 2014
There was a modest dip in the number of VC-backed
IPO’s in 4Q, but those companies which managed to
go public raised 11% more than the previous quarter.
The bigger picture trend can be seen in the long term
figures, which reveal an IPO market that has been
improving in fits and starts for the past two years. On
an annual basis, 2018 was the strongest year both in
the number of offerings and the amount raised since
2014.
Biotech company Moderna Inc. had the quarter’s top
IPO, raising $604.35 million. Traded on Nasdaq as
MRNA, the company was valued at $8.58 billion at
listing.
1 7
LIQUIDITY
U.S. VC-Backed IPO Activity (2015–2018)
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18
Raised ($B) through IPO $1.36 $0.38 $0.79 $0.99 $0.69 $3.95 $2.04 $0.62 $2.65 $1.75 $4.78 $2.32 $2.58
Number of IPOs 16 6 11 13 8 7 20 8 25 16 31 22 17
0
5
10
15
20
25
30
35
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC-BACKED IPOs IN 4Q
1 8
LIQUIDITY
Company Name Location
Brief Description
Industry Code Industry Segment
Industry Group
Close Date
Raised through IPO ($M) Exchange
Moderna Inc. Cambridge, MA Developer of messenger RNA (mRNA) therapeutics
and vaccines.
Biotechnology Therapeutics Biopharmaceuticals Healthcare 12/7/2018 $604.35
Nasdaq: MRNA
Allogene Therapeutics Inc.
South San Francisco, CA
Developer of cancer treatments.
Biotechnology Therapeutics Biopharmaceuticals Healthcare 10/11/2018 $324.00
Nasdaq: ALLO
Anaplan Inc. San Francisco, CA Provider of on-demand planning and enterprise
performance applications.
Business Applications
Software Software
Information Technology 10/12/2018 $263.50
NYSE: PLAN
Elastic N.V. Mountain View,
CA Provider of big data search
and analytics software. Database Software Software Information Technology 10/5/2018 $252.00
NYSE: ESTC
Guardant Health Inc.
Redwood City, CA
Provider of genomic cancer testing.
Diagnostic Equipment (Not
Imaging)
Medical Devices and Equipment Healthcare 10/4/2018 $237.50
Nasdaq: GH
V E N T U R E C A P I T A L R E P O R T
ABOUT US
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers, and service providers find deal and
partnership opportunities, perform comprehensive due diligence, and examine trends in venture capital investment, fundraising, and liquidity. It
provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry, and stage of
development throughout the world.
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.
No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.
1 9
V E N T U R E C A P I T A L R E P O R T
ABOUT DOW JONES
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