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Digital-NY-Press-Release-Q4-2015_FINAL

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Digital-NY-Press-Release-Q4-2015_FINAL

  1. 1. 1 January 2016 Linda Gridley Partner, Co-Head of Digital Media Group – New York lgridley@agcpartners.com 212-400-9710 Gee Leung Partner, Digital Media Group – San Francisco gleung@agcpartners.com 650-241-1490 Jon Guido Partner, COO, Co-Head of Digital Media Group - Boston jon@agcpartners.com 617-261-4126 Markus Salolainen Partner, Head of Europe, Digital Media Group - London msalolainen@agcpartners.com +44 7776 193 861
  2. 2. 2 497+ Strongest Year Ever for Digital NY Scene! $4.5 Billion Raised During the Year 7 Sale Transactions Over $100mm 12 Financings $100mm and Over 48 Private Companies and 15 VC/PE Firm Added to AGC Database Overview 2015 was a breakout year for New York VC funding with total announced funding up 67% to $4.5 billion versus $2.7 billion in 2014. Contributing to the strongest year yet for Digital NY, there were twelve $100m+ financings in 2015 versus only one $100m+ financing in 2014. Since 2010, over $15.1 billion has been raised for Digital NY companies. eCommerce had the most fundraising activity and represented 33% of all dollars raised in Digital NY for 2015. This was followed by Content (31%), Marketing (21%), Mobile (8%) and Social (7%). For Q4 2015, Digital New York VC financing increased by 107% compared to Q4 2014 but decreased by 39% compared to Q3 2015 due to the six $100m+ financings in Q3 2015. 21 companies we had already been tracking completed follow-on financings in Q4 2015, raising $844 million in total. The largest funding round of the quarter was completed by Jet.com, which raised $500 million. This is tied with Vice Media for the largest financing completed in Digital NY. eCommerce and Digital Content were the most active sectors for financing in Q4 representing 67% and 17% of the total dollars raised. Q4 2015 also saw three M&A exits with the $180 million sale of Undertone to Perion being the most significant. There were fewer M&A deals comparatively this year for Digital NY, but there were a lot more larger deals. There were seven $100m+ sales in 2015 versus only two $100m+ sales in 2014. There was one Digital NY IPO in 2015 – the $75m IPO of Etsy in Q2. Digital New York VC Funding Q4 2015 ($mm)1 Funding by Sector Q4 2015 ($mm)1 Source: Capital IQ. 1 Includes digital companies based in New York that either have raised at least $5 million of outside capital or are prominent enough in the Digital NY scene to merit inclusion.
  3. 3. 3 Overview (continued) Thanks to a particularly strong Q2 and consistent activity throughout the year, 2015 was a very good year for Digital NY M&A with the total announced transaction volume in excess of $6.4 billion. As noted earlier, it is very exciting to report that there were seven $100m+ M&A deals in 2015 versus only two $100m+ deals in 2014. Out of the seven $100m+ deals in 2015, the two Digital Content deals represented 74% of total deal volume. This is mainly due to the $4.4billion sale of AOL to Verizon in Q2 – the largest transaction in Digital NY history followed by the $343 million sale of Business Insider to Axel Springer. There were four $100million+ Digital Marketing M&A deals in 2015, all in adtech– the sale of Media Ocean to Vista Equity ($720mm), Exelate to Nielsen ($195m), Undertone to Perion ($180mm), and Yieldex to AppNexus ($100mm). The final $100mm+M&A deal in 2015 was the sale of eCommerce company Borderfree to Pitney Bowes ($448mm). Private Digital NY Sale Transactions >$100 Million since 2010 Source: CapIQ; TechCrunch; public filings; WSJ; Business Insider; and press releases *Represents 100% Enterprise Value – Vista Equity Partners paid $594 for 82.5% stake
  4. 4. 4 Overview (continued) 2015 was a tough year for tech IPOs generally and Digital NY followed that trend. The only Digital NY company to go public this year was the vintage ecommerce company Etsy and its story as a public company isn’t a pretty one. The Company went public at $16.00 and finished the year down 48.0% to $8.26. The six Digital NY companies that have gone public since 2007 performed much worse than the overall market in 2015 with a median performance of (38.0)% versus (1.0%), (2.0%), and +6.0% for the S&P 500,Dow Jones, and NASDAQ. Digital NY IPOs (2007 to Date) Source: CapIQ; Thomson Reuters; 451 Research; Market Watch (a) IPO date to closing price on 12/31/15
  5. 5. 5 Overview (continued) As noted earlier, 2015 was also a breakout year for Digital NY financings. Total announced funding was up 66.7% to 4.5 billion. VC/PE funding trends followed the M&A scene with twelve $100m+ financings in 2015 versus only one $100m+ financing in 2014. eCommerce led the way with the $500mm investment in Jet.com, $145mm investment in Jet.com, the $135mm funding for Blue Apron and the $100mm financing for Warby Parker. Digital Content was the second largest fundraiser led by Buzzfeed ($300mm), FanDuel ($275mm), Purch ($135mm) and Saavn ($100mm). (Financings by Dataminr ($130mm), ZocDoc ($130mm), Zeta Interactive ($125mm) and Ambatana ($100mm) rounded out Digital NY’s 2015 top financings.
  6. 6. 6 Jet.com Poppin and Schoology Receive Largest Digital NY Financings of Q4 2015 For Q4 2015, eCommerce marketplace companies received the largest amount of funding as seven companies raised a total of approximately $607 million. In November 2015, Jet.com announced that it will raise $500 million in Series B funding. The Company operates a members-only shopping club that provides clients with best price on various products. This current round values Jet.com at a post-money value of $1.5 billion. It is being led by Fidelity Investments with additional participation from Alibaba Capital Partners, Bain Capital Ventures, and Google Ventures. Total funding to date is $554 million for this latest unicorn. Another online retailer, Poppin, also announced in November 2015 that it will raise $41 million in funding. The Company retails various work-lifestyle products online, with products ranging from basic office essentials, to school supplies, to key business solutions for creating happy workspaces and thriving companies. The Company has raised $75M in funding to date. In addition to these financings, Zola, an innovative Wedding Registry platform, announced in November that it will raise $10 million in Series B funding. This round was led by Canvas Ventures with participation from BBG, Female Founders Fund, Forerunner Ventures, Thrive Capital, and Morgenthaler Technology Investment Company and it brings the Company’s total funding to $19 million. Also in November, eCommerce marketing software provider Bluecore announced that it will raise $21 million in Series B funding led by Georgian Partners with participation from FirstMark Capital and Felicis Ventures. The Company’s marketing solution automates the process of creating and distributing triggered emails in reaction to customer behavior. Bluecore has received total funding of $65 million to date. Digital Content was also an active sector for financing this quarter with total announced funding of approximately $153 million. In November 2015, Schoology announced that it will raise $32M in Series D funding. Schoology develops a cloud-based learning management platform that allows institutions to create engaging content, design lessons, and assess student understanding; and enables students and faculty to connect, communicate, and share with their peers across campus and around the world. This round was led by JMI Equity with additional participation from FirstMark Capital, Great Road Holdings, and Intel Capital. In November 2015, ClassPass announced that it received $30 million in Series C funding led by Google Ventures, with participation from existing investors General Catalyst and Thrive Capital. ClassPass offers an online subscription service that provides access to fitness classes across multiple gyms, studios, and fitness classes. Video was a popular sub segment within the Digital Content sector this quarter. NowThis Media, a digital video news outlet that provides original news content for mobile devices and social platforms, announced in December that it will raise $16 million. The round was led by Axel Spring Ventures with participation from Oak Investment Partners, NBC Universal, and SoftBank Capital. Another Video notable financing was YouNow, which operates a social television platform that allows anyone to broadcast live, in front of an audience, from any webcam or mobile device. In October 2015, the Company announced that it will raise $15 million in funding co-led by existing investor Venrock and individual investor Oren Zeev, a former Apax partner, turned entrepreneur and angel investor, with participation from Comcast Ventures and Union Square Ventures. Marketing was another active sector for financing this quarter with total announced funding of approximately $70 million. In December 2015, Innovid announced that it will raise $27.5 million, and JWPlayer announced that it will raised $20 million. Sources: Capital IQ, Crunchbase, press releases, WSJ
  7. 7. 7 Notable Digital New York Fundraisings — Q4 20151 M&A: Three Digital New York Exits – Q4 20151 On December 1 st , Perion Network announced the acquisition of Undertone Networks for $180 million. Undertone provides cross-screen marketing campaign management SaaS and operates an online display and video advertising network for corporate brands and businesses. In the Company’s press release, Perion described Undertone as “a premium brand company of scale and profitability, with a differentiated sustainable position in the market.” This acquisition will help Perion establish itself as the leading delivery solution of high-quality advertising for publishers and brands. On November 16 th , MatomyMedia Group acquired Optimatic Media for $25 million. Following the trend of increased financings in the video advertising sector, Optimatic Media provides supply-side, programmatic application monetization SaaS for video-based mobile advertising campaigns. Matomy’s press release highlighted this trend: “in the coming years, video will play an important role in the revenue that will be generated from mobile advertising.” On October 2 nd , XO Group announced the acquisition of the remaining 72% stake in GigMasters.com, bringing XO Group’s total ownership to 100%. GigMasters.com provides online event booking services that help users find vendors, compare prices, and book professionals for various special occasions.
  8. 8. 8 Additions to Our Digital New York Guide Private Companies: This quarter we added zero marketing, one eCommerce, two content, one social, and two mobile companies to our database. We add a company to our Digital NY database when it has raised at least $5 million in outside capital to date, or when it has generated significant “buzz” in the New York tech community.  Marketing:  eCommerce: Mouth Foods  Content: YouNow, Gimlet Media  Social: Conversocial  Mobile: MastMobile, mParticle VC/PE Firms: We added 1 firm to our investor database. We add new VC/PE firms to our Digital NY database when we see that they have made investments in Digital NY companies.  Viola Private Equity Viola Private Equity is an Israeli-based technology growth capital and buyout fund that focuses on investing in global companies at an expansion phase. They invest in new media, software, communications, cleantech/agritech, med-tech, and technology-enabled services. Their selection criteria include technology-oriented firms with scalable management teams and profitable existing business models.
  9. 9. 9 AGC’s Guide to Digital New York includes:  430 private emerging digital companies broken down into 5 major sectors and 36 subsectors – including company descriptions, funding history, and URL  177 venture capital & private equity firms investing in the digital NY sector, categorized by investment profile and by physical presence in NY The guide is intended for parties interested in knowing who’s who in the New York digital scene. Venture capital and private equity firms, entrepreneurs, and public companies looking for acquisitions are just a few of the possible users who could benefit from the Guide’s centralized information. About AGC: AGC Partners, now in its 13th year of business, just completed a record year with 28 transactions in 2015. With buyers and sellers across the United States, Europe, and Asia, AGC is more active than ever with outstanding relationships across the globe with entrepreneurs, strategic buyers and private equity professionals. Since AGC Partners' inception in 2003, we have completed 263 technology M&A and growth equity transactions. Moreover, AGC has completed 48 consecutive quarters of profitability. Our continued passion is to discover and work with exciting emerging growth companies, helping them to achieve their vision. For more information on AGC Partners, visit www.agcpartners.com. Note: This document is intended to serve as information only, and to suggest that further analysis and consideration may be warranted. Unless otherwise indicated, AGC does not believe that the information contained herein is sufficient to serve as the basis of an investment decision. There can be no assurance that these statements, estimates or forecasts will be attained and actual results may be materially different. Only those representations or warranties which are made in a definitive purchase agreement will have any legal effect. To learn more about the company/companies that is/are the subject of this commentary, contact one of persons named herein who can give you additional information. Jon Guido Partner, COO, Co-Head of Digital Media Group – Boston jon@agcpartners.com 617-261-4126 Linda Gridley Partner, Co-Head of Digital Media Group – New York lgridley@agcpartners.com 212-400-9710 Gee Leung Partner, Digital Media Group – San Francisco gleung@agcpartners.com 650-241-1490 Markus Salolainen Partner, Head of Europe, Digital Media Group – London msalolainen@agcpartners.com +44 776 193 861

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