PwC MoneyTree Report: Q3 2012
 

PwC MoneyTree Report: Q3 2012

on

  • 301 views

The Q3 2012 MoneyTree™ results are in! This special report provides summary results of Q3 2011, Q2 2012 and Q3 2012. More detailed results, including an expanded version of this report, can be found ...

The Q3 2012 MoneyTree™ results are in! This special report provides summary results of Q3 2011, Q2 2012 and Q3 2012. More detailed results, including an expanded version of this report, can be found on the MoneyTree™ website at www.pwcmoneytree.com.

Statistics

Views

Total Views
301
Views on SlideShare
301
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

PwC MoneyTree Report: Q3 2012 PwC MoneyTree Report: Q3 2012 Document Transcript

  • www.pwcmoneytree.com PricewaterhouseCoopers National Venture Capital Association Data provided by Thomson Reuters MoneyTree Report TM Q3 2012 The Q3 2012 MoneyTree™ results are in! This special report provides summary results of Q3 2011, Q2 2012 and Q3 2012. More detailed results, including an expanded version of this report, can be found on the MoneyTree™ website at www.pwcmoneytree.com
  • Total equity investments into venture-backed companies Venture capitalists invested $6.5 billion in 890 deals in the third quarter of 2012, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters. Quarterly venture capital (VC) investment activity declined 11 percent in terms of dollars and five percent in the number of deals compared to the second quarter of 2012 when $7.3 billion was invested in 935 deals. Investment for the first three quarters of the year was $20 billion into 2,661 deals, a level well below this point last year, making it likely that 2012 will fall short of 2011 in terms of both dollars and deal volume. Venture investment declined across all stages of development in both dollars and deals in the third quarter of 2012. $ in millions 20 `04 `05 `06 `07 7,387 6,860 7,531 8,260 7,835 `08 `09 `10 `11 `12 15 10 8,437 6,346 6,441 6,443 6,083 6,634 6,770 5,862 5 5,096 8,129 8,082 7,639 8,126 7,241 7,130 6,733 5,917 6,243 5,183 5,440 5,231 5,650 5,184 7,311 7,340 6,187 6,488 5,419 3,911 0 Quarter Number of deals 2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (877) (723) (870) (760) (859) (810) (861) (901) (1,006) (950) (1.010) (905) (1,111)(1,048)(1,139)(1,055)(1,104) (1,046) (963) (680) (759) (756) (937) (815) (1,017) (877) (902) (894) (1,068) (992) (952) (836) (935) (890) PwC
  • Investments by industry Q3 2011, Q2 2012, and Q3 2012 The Software industry received the highest level of funding for all industries with $2.1 billion invested into 304 deals during Q3 2012, marking the fourth quarter in the last five in which investment in Software exceeded two billion dollars. This level of investment represents a 12 percent decline in dollars and a one percent increase in deal volume from the second quarter when $2.4 billion was invested in 300 deals. going into 250 deals but remained well above the billion dollars per quarter level that has been prevalent for the last two years. Additionally six of the top 10 deals for the quarter were in the Internet-specific category. ‘Internet-specific’ is a discrete classification assigned to a company with a business model that is fundamentally dependent on the Internet, regardless of the company’s primary industry category. Life Sciences (Biotechnology and Medical Devices) investing increased in terms of dollars but declined in deal volume for the third quarter of 2012 with $1.7 billion going into 181 deals, comprising 26 percent of VC dollars invested. Investment in Biotechnology increased by 64 percent in terms of dollars and 22 percent in terms of deals with $1.2 billion going into 116 companies in Q3 2012. This increase is driven by a number of larger, follow-on rounds in the third quarter compared to Q2 2012 when just $755 million went into 95 companies. Medical Device investing declined for the third consecutive quarter, falling 37 percent in dollars and 27 percent in deal volume with $434 million going into 65 companies, experiencing the lowest dollar level of investment since 2004. Overall, Life Sciences investment for the first three quarters of 2012 is down 19 percent in dollars and 12 percent in deals from the same time period in 2011. The Clean Technology sector, which crosses traditional MoneyTree industries and comprises alternative energy, pollution and recycling, power supplies and conservation, also saw a 20 percent decrease in dollars but a two percent increase in deal volume with $791 million going into 58 deals during the third quarter of 2012 compared to $991 million going into 57 deals in the second quarter of 2012. The dollar decrease in Q3 2012 occurred despite the fact that three of the top ten deals fell into the Clean Tech category, suggesting most of the remaining deals of the quarter were comprised of smaller rounds. Internet-specific investing fell 12 percent in dollars and eight percent in deals from the previous quarter with $1.7 billion # of Deals Software 82 94 79 Industrial/Energy 73 57 49 Media and Entertainment Medical Devices and Equipment 125 111 101 Retailing/Distribution 15 16 17 Computers and Peripherals 12 11 17 Semiconductors 38 31 23 Consumer Products and Services 29 37 39 Financial Services 14 8 16 1,000 108 95 116 IT Services 500 1,500 Networking and Equipment $2,079 $483 $524 $750 $582 $434 $116 $151 $63 $81 Electronics/ Instrumentation Business Products and Services 17 13 7 Other 8 5 7 13 6 10 $231 $251 $162 $149 $97 $51 $143 $52 $94 $93 $138 12 11 13 $89 $54 $83 $57 $71 $55 $932 $716 $751 $687 $242 $155 35 37 19 $1,240 $605 $476 $454 $2,368 $1,155 $755 6 14 8 Healthcare Services 2,500 $2,177 89 89 65 Telecommunications ($ in millions) All results rounded 2,000 316 300 304 Biotechnology 0 Seven of the 17 MoneyTree sectors experienced increases in dollars invested in the third quarter, including Financial Services, Healthcare Services, Business Products and Services and Retailing. A total of 10 of the MoneyTree sectors showed a decline in Q3 including Media and Entertainment, Semiconductors, Telecommunications and IT Services. $338 $323 $249 Q3 2011 $199 Q2 2012 $142 Q3 2012 $5 $20 $5 $7 $4 ($ in millions) All results rounded 0 Grand Total 992 935 890 5,000 10,000 15,000 20,000 $7,340 $7,311 $6,488 Definitions of the Industry categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com Unknown region totals not included MoneyTree Report TM 3
  • Investments by stage of development Q3 2011, Q2 2012, and Q3 2012 Seed stage investments fell 22 percent in dollars and seven percent in deals with $178 million invested into 67 deals in the third quarter of 2012. Early stage investments also declined, falling 21 percent in dollars and seven percent in deals with $1.7 billion going into 395 deals. Seed/Early stage deals accounted for 52 percent of total deal volume in Q3 2012, compared to 53 percent in the second quarter of 2012. The average Seed deal in the third quarter was $2.7 million, down from $3.2 million in Q2. The average Early stage deal was $4.4 million in Q3 2012, down from $5.2 million in the prior quarter. Expansion stage deals accounted for 27 percent of venture deals in the third quarter of 2012, and the average Expansion stage deal was $10.8 million, down from $11.1 million in the prior quarter. Investments in Later stage deals decreased 10 percent in dollars and four percent in deals to $2.0 billion going into 187 rounds in the third quarter of 2012. Later stage deals accounted for 21 percent of total deal volume in Q3 2012, similar to Q2 when $2.2 billion went into 195 deals. The average Later stage deal in the third quarter was $10.5 million, which is a slight decline from $11.2 million in the prior quarter. Expansion stage investment decreased just three percent in dollars and one percent in deals in the third quarter of 2012, with $2.6 billion going into 241 deals. Overall, # of Deals Seed 395 424 395 Expansion 2,000 273 244 241 Later Stage 1,000 213 195 187 # of Deals Grand Total 992 935 890 3,000 4,000 5,000 $220 $229 $178 111 72 67 Early Stage ($ in millions) All results rounded 0 $1,728 7,000 8,000 Q3 2011 $2,155 $2,197 Q2 2012 $2,505 $2,701 $2,614 Q3 2012 $2,459 $2,184 $1,968 0 6,000 5,000 10,000 15,000 20,000 ($ in millions) All results rounded 25,000 $7,340 $7,311 $6,488 Definitions of the Stage of Development categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com 4 PwC
  • Investments by sequence of financing Q3 2011, Q2 2012, and Q3 2012 First-time financing (companies receiving venture capital for the first time) dollars declined eight percent in dollars to $1.0 billion in Q3 2012, but the number of deals increased one percent to 297 deals in the third quarter. First-time financings accounted for 16 percent of all dollars and 33 percent of all deals in the third quarter, compared to 15 percent of all dollars and 32 percent of all deals in the second quarter of 2012. experienced a continued drop in first-time deal volume to just 15 rounds in the third quarter while Medical Device first time financings remained low at 17 rounds. The average first-time deal in the third quarter of 2012 was $3.4 million, down slightly from $3.7 million in the prior quarter. Seed/Early stage companies received the bulk of first-time investments, garnering 82 percent of the deals. Companies in the Software, Media & Entertainment, and IT services industries received the most first-time rounds in the third quarter of 2012. The Biotechnology sector # of Deals ($ in millions) All results rounded 0 1,000 2,000 3,000 4,000 5,000 $1,288 $1,103 $1,016 First 335 295 297 Second & Third 296 328 295 Fourth, Fifth, & Sixth 218 174 171 $1,773 Seventh & Beyond 143 138 127 $1,759 $1,801 $1,763 # of Deals Grand Total MoneyTree Report TM 992 935 890 8,000 Q2 2012 $2,317 $2,209 5,000 7,000 Q3 2011 $1,975 $2,198 $1,935 0 6,000 Q3 2012 10,000 15,000 20,000 ($ in millions) All results rounded 25,000 $7,340 $7,311 $6,488 5
  • Investments by region Q3 2011, Q2 2012, and Q3 2012 Silicon Valley received the highest level of funding for all regions in third quarter 2012 with a decrease of 28 percent over the second quarter with $2.6 billion going into 268 deals. New England received the second highest level of funding and deals completed with $826 million going into 107 rounds falling 3 percent from last quarter. NY Metro investments also experienced a decrease, dropping 23 percent in terms of dollars and 22 percent in deals with $513 million going into 88 companies. # of Deals 0 500 1,000 1,500 Eight of the 18 MoneyTree regions experienced increases in dollars invested in the third quarter of 2012, including South Central (1040 percent increase), Upstate NY (900 percent increase) and Philadelphia Metro (198 percent increase). Additionally, eight of the 18 regions also experienced increases in the number of deals. 2,000 2,500 3,000 $2,788 Silicon Valley 306 307 268 New England 119 113 107 NY Metro 122 107 88 LA/Orange County 67 65 59 Midwest 63 74 81 Southeast 46 48 51 24 29 20 36 33 47 $246 $203 $216 Northwest 51 33 37 $313 $243 $195 Colorado 27 24 28 Philadelphia Metro 35 25 26 Texas 42 38 35 North Central 18 12 10 $124 $80 $100 South West 16 19 19 $110 $112 $81 South Central 11 4 8 $6 $5 $57 Upstate NY 6 2 6 $30 $2 $20 AK/HI/PR 1 0 Sacramento/N.Cal 2 2 4,000 $218 $321 $242 DC/Metroplex ($ in millions) All results rounded $229 $228 $242 San Diego 3,500 $3,362 $2,619 $690 $513 $633 $848 $826 $948 $453 $541 $453 $289 $321 $446 $161 $164 $181 $85 $57 $170 $179 $128 $613 Q3 2011 Q2 2012 Q3 2012 0 36 11 0 ($ in millions) All results rounded 0 Grand total 6 992 935 890 1,000 2,000 3,000 4,000 5,000 6,000 7,000 $6,488 8,000 $7,340 $7,311 PwC
  • Q2 2012 most active venture investors Kleiner Perkins Caufield & Byers closed the most deals in the third quarter 2012 with a total of 27 deals. First Round Capital and DreamIt Ventures tied for second with 23 deals each. New Enterprise Associates, Inc rounded out the top three with 20 deals. The 20 most active venture investors accounted for 14 percent of total venture-backed deals for the quarter. Most active are those investors who participated in ten or more deals in the third quarter of 2012. Firm City Kleiner Perkins Caufield & Byers Menlo Park, California First Round Capital Philadelphia, Pennsylvania DreamIt Ventures Bryn Mawr, Pennsylvania New Enterprise Associates, Inc. Firm City 27 Sequoia Capital Menlo Park, California 11 23 Bessemer Venture Partners Larchmont, New York 11 23 Atlas Venture Cambridge, Massachusetts 11 Menlo Park, California 20 Greycroft Partners LLC New York, New York 10 500 Startups, L.P. Mountain View, California 19 Versant Ventures, Inc. Menlo Park, California 10 True Ventures Palo Alto, California 14 Mohr Davidow Ventures Menlo Park, California 10 Lightspeed Venture Partners Menlo Park, California 14 Menlo Ventures Menlo Park, California 10 General Catalyst Partners Cambridge, Massachusetts 14 Canaan Partners Westport, Connecticut 10 Andreessen Horowitz Menlo Park, California 13 Accel Partners Palo Alto, California 12 DFJ Mercury Houston, Texas 12 Google Ventures Mountain View, California 11 MoneyTree Report TM # of deals # of deals 7
  • pwcmoneytree.com Contacts Tracy T. Lefteroff Global Managing Partner Venture Capital Practice tracy.t.lefteroff@us.pwc.com David Silverman Emerging Company Services Practice Co-lead david.silverman@us.pwc.com Danny Wallace Emerging Company Services Practice Co-lead danny.wallace@us.pwc.com PricewaterhouseCoopers and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTreeTM Report has been obtained from reliable sources. However, neither of the parties nor Thomson Reuters can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time. Before making any decision or taking any action, you should consult a competent professional adviser. pwc.com © 2012 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. NY-13-0274