Venture Capital Deals In Q1 2015 Up 50% On Q1 2014 by Christopher Elvin, Head of Private Equity Products, Preqin

The venture capital industry has delivered another quarter of strong deal making. The amount of capital invested in young companies is up over 50% on the amount of capital invested in the first quarter of 2014, and has even surpassed deal making in Q4 2014, which was the highest on record. Although there has been a slight drop in the number of companies receiving venture capital investment globally, the average size of deals has been growing significantly over recent years. The average size of later stage deals (Series D or later) has been over $100mn for the past two quarters, and seed financing is up 25% on 2014.

Venture Capital Investment

Other Key Venture Capital Deal Market Facts:

  • The number of venture capital financings in Q1 2015 represent a decrease of 6% on the previous quarter, from 1,817 to 1,701, whereas there has been a 4% increase in the aggregate value of deals.
  • Deal flow in North America has fallen 8% from 1,019 deals in Q4 2014 to 935 deals in Q1 2015, with a 7% increase in value.
  • Europe has witnessed a drop in deal volume and an uptick in value, with 333 deals valued at an aggregate $2.8bn this quarter, representing a respective 4% drop and 41% increase from the previous quarter.
  • The average value of angel/seed financing rounds so far in 2015 is $1.5mn, 25% higher than the average in 2014 and the highest average value since 2007.
  • Series D stage and later deals showed the largest increase in average deal value at 37%, from $73.1mn in 2014, to $100mn so far in 2015.
  • SpaceX was the largest venture capital investment in Q1 2015, receiving $1bn in capital from a consortium of investors for an unspecified financing round. Uber also received $1bn in a Series E financing round.
  • The largest exit from venture capital investments was the trade sale of Auspex Pharmaceuticals to TEVA Pharmaceuticals for $3.2bn.
  • Dry powder (capital available for investment) for venture capital investments currently stands at $132bn, up from $121bn at the start of the year.

Venture Capital Investment

For more information and analysis, please see the factsheet that follows.

Comment:

“Venture capital financing has had another record quarter. Almost $30bn was invested in companies worldwide, a substantial growth on the amount of capital invested during the same quarter last year. Although the number of companies receiving funding is slightly down, the growth in capital being invested will be welcome to young firms looking for private investment.

Managers still have significant amounts of capital to deploy, and with many innovative companies vying for investment worldwide, deal activity is likely to remain strong in 2015. Yet with the average size of deals growing significantly, there might be slight concerns that valuations for potential investments are becoming inflated.”

Christopher Elvin, Head of Private Equity Products – Preqin

Venture Capital Investment