Uber-Size Deals Dominate Mega Year in U.S. Venture Activity

Venture capital firms invested more than $47.3 billion in U.S. startups in 2014, marking the highest funding level of VC funding since 2001, according to data being released today by CB Insights, the New York-based venture capital database.

The $47.3 billion was 62 percent more than the $29.2 billion that venture firms invested in 2013. Yet much of the difference was due to a few dozen mega deals in which VC firms invested at least $100 million in a single round. Based on CB Insights data, the total count for venture deals in 2014 was 3,617, which was only 8 percent more than the 3,354 deals counted in 2013.

In the fourth quarter, a December surge of $7.1 billion that included mega investments in Uber and Snapchat drove VC funding to more than $13.5 billion in 884 deals.

That was nearly 69 percent more than the $8 billion that VCs invested during the fourth quarter of 2013, but again, the number of investment deals was only 4 percent more than the 849 deals in the year-ago quarter.

VC Activity 2014 CB InsightsMega deals involving Uber (which raised a total of $2.4 billion in two rounds last year), Snapchat, Instacart, and Square also drove venture funding in the mobile sector to a record $3.1 billion in the fourth quarter, and $7.8 billion for the year. The funding total in the mobile sector last year was more than double the $3.7 billion that VCs invested in 2013, but the 571 deals in 2014 was only 10 percent more than the 521 mobile deals counted in 2013.

Internet companies continued to attract the most venture capital, though, as VCs invested more than $19.6 billion in 1,675 deals last year. That was two-thirds more than the $11.8 billion that VCs invested in the Internet sector in 2013. Internet deal volume in 2014 was just 7 percent higher than the 1,562 deals counted that year.

Healthcare funding amounted to more than $8.2 billion in 2014, about 28 percent more than the $6.4 billion that went into healthcare in 2013. The deal count declined, however. CB Insights counted 537 healthcare deals in 2014, which was a 2 percent decline from the 550 deals counted in 2013.

While venture deal funding by stage remained within … Next Page »

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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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