According to PwC’s February 2015 MoneyTree Report, venture capital is booming. Not only was 2014 a good year, up 4% from 2013, the fourth quarter of 2014 was very strong, representing more than 30% of the total VC funds invested for the year. The report also highlights the that the software sector took in the most venture capital in 2014, a record-setting 41% of the total VC funds invested in all sectors.
Breakdown of 2014 venture capital numbers
The Feb 2015 MoneyTree report notes that venture capitalists invested a total of $48.3 billion in 4,356 deals in 2014. That is 61% more dollars invested and a 4% boost in the number of deals in 2013. The fourth quarter of 2014 was exceptionally busy, with a record $14.8 billion being invested in 1,109 deals.
Warren Buffett’s Annual Letter: Mistakes, Buybacks and Apple
Warren Buffett published his annual letter to shareholders over the weekend. The annual update, which has become one of the largest events in the calendar for value investors, provided Buffett's views on one of the most turbulent and extraordinary years for the financial markets in recent memory. Q4 2020 hedge fund letters, conferences and more Read More
Overview of 2014 venture capital by sector
The report points out that the software industry saw the largest VC investment for the year. The sector was up 77% on a dollar basis over 2013 to $19.8 billion, and saw 1,799 deals, a 10% increase in deal volume over the previous year. Of note, biotechnology investment dollars were up 29%. but volume was off by 4% in 2014, with $6 billion of venture capital invested into 470 deals. Biotech was the second largest investment sector in terms of dollars invested for 2014.
The media and entertainment sector saw the second largest number of deals in 2014 at 481, but it was in third place in terms of dollars invested with an annual total of $5.7 billion.
Total investments in the life sciences sector (biotechnology and medical devices combined) in 2014 soared to the highest level since 2008 with more than $8.6 billion invested into 789 deals. This represented a 29% increase in dollars, but a 3% decrease in deals relative to 2013. Of note, the dollars invested into life sciences companies represented 18% of total venture capital investments last year.
Given the explosion in eCommerce, it’s not too surprising that Internet-specific companies saw a 68% increase in VC dollars in 2014, but a 6% decline in deals. A total of $11.9 billion went into 1,005 rounds, compared to 2013 when $7.1 billion was invested in 1,074 deals. Internet-specific firms represented 25% of all venture capital dollars in 2014.
Finally, 14 of the 17 industry sectors saw increases in dollars invested last year. Retailing/distribution VC dollars were up 265%, computers and peripherals saw a 132% rise, electronics/instrumentation dollars increased 128% and financial services venture capital investment was up a solid 109%.
See full report below.