Big Late-Stage Deals and Unicorns Drive U.S. Venture Activity Higher

7/10/14Follow @bvbigelow

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over 50 percent of all U.S. venture-backed IPOs were in the healthcare sector during the quarter. The biggest IPO valuation for a U.S. company was San Mateo, CA-based GoPro, which was valued at roughly $3.6 billion when it went public late last month.

California continues to dominate the geographical stats, accounting for more than $8.9 billion (55 percent) of all capital invested nationwide, and 442, or 45 percent, of all deals in the quarter. Most of that venture activity was focused in Silicon Valley, though, with San Francisco and eight cities representing more than 300 deals and $6.9 billion in startup capital.

Yet, VC investments in New York also showed strong growth, reaching more than $1.1 billion for the quarter. Nearly 90 percent of that was invested in New York’s Internet and mobile sectors, and the Empire State’s share of deals (108) eclipsed Massachusetts for the tenth consecutive quarter.

VCs invested $393 million in 27 deals in Washington state during the quarter, and $139 million in 32 startups in Texas, according to CB Insights.

As usual, the Internet sector accounted for the single biggest chunk of venture capital in the quarter, with $5.6 billion (45 percent) going into 437 deals (41 percent) throughout the United States.

Venture investments in the mobile and telecom sector, driven by mega investments in such companies as Uber, Lyft, Apigee, and Kony, leaped to a record $2.59 billion—132 percent higher than the $1.1 billion high set in the third quarter of 2013.

The healthcare sector rebounded during the quarter, with over $2.7 billion going into 161 deals. Venture activity even picked up in the cleantech sector, with $777 million invested in 51 deals. That was a 67 percent increase in funding and a 28 percent rise in deals compared with the same quarter in 2013, when venture firms invested $465 million in 40 deals.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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