Venture-Backed IPOs & Late-Stage Investments Surged in Q1

4/10/14Follow @curtwoodward

Venture capitalists saw the public markets awaken in the first quarter, and they’re betting the trend will continue.

A new report from New York-based venture capital research firm CB Insights counts 35 venture-backed IPOs through the end of March, more than any single quarter since the fall of 2000. Mergers and acquisitions were also strong, with 174 deals tallied in the first quarter.

In response, investors have been pouring money into the next wave of mature companies that might make for a strong payout.

Venture investments in the first quarter were just short of $10 billion, the highest level for VC funding since the second quarter of 2001, CB Insights reports.

Late-stage deals with big price tags were the main driver, led by the $900 million Series F investment in Cloudera and $280 million Series D round for Tango.

Overall, Series D and later financings represented a whopping 47 percent of all the U.S. venture dollars raised last quarter, a much bigger share than we’ve seen for the past year at least.

CB Late Stage Smaller

The first quarter also saw more companies cross the threshold of raising money at a reported $1 billion or higher valuation, with 11 such deals reported. That equals the number of first-time billion-dollar valuations recorded by CB Insights all of last year.

“Yes, the market is frothy,” the firm said.

CB Billions Smaller

Things stayed pretty close to the script in regional competition for venture deals. California leads the way, of course, with New York and Massachusetts jockeying for the No. 2 position nationally.

Texas rose to a five-quarter high in CB’s report by capturing 6 percent of the venture dollars invested nationally last quarter. Washington state’s venture funding share, meanwhile, fell after an outperforming fourth quarter.
CB Regional Smaller

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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