US early stage startup funding report
-
Upload
takayuki-yamazaki -
Category
Small Business & Entrepreneurship
-
view
41 -
download
3
Transcript of US early stage startup funding report
US EARLY-STAGE TECH REPORTEarly-stage financing trends, most active investors, well-funded companies, and more.
The technology market intelligence platform.CB Insights software lets you predict, discuss, and communicate emerging technology trends using data in ways that are beyond human cognition.
www.cbinsights.com 2
www.cbinsights.com 3See what other customers have to say at http://www.cbinsights.com/customer-love
A FEW OF OUR HAPPY CUSTOMERSThe most publicly reference-able customers of anyone in the industry
Pat GradySequoia Capital, Partner
“Think of the fundamental value chain of venture capital … If we play the clock forward, the finding and assessing of investments will be almost entirely done by technology, not human beings. And the company that is today positioned to be the market leader in that evolution is CB Insights."
www.cbinsights.com 4
From the NY Times to Bloomberg, CB Insights data is used by hundreds of leading media outlets every week
“ACCORDING TO CB INSIGHTS…”
CB INSIGHTS NEWS MENTIONS PER YEAR
62 9 16
211
490
1200
1600
2010 2011 2012 2013 2014 2015 2016(YTD)
SUMMARY OF FINDINGS
www.cbinsights.com 5
$2.2 BILLION ACROSS 810 DEALS IN Q3’16: US-based early-stage (Seed and Series A) technology companies saw a 12% increase in deal activity on a quarterly basis in Q3’16 with 810 deals completed across $2.2 billion in funding. Despite an increase in Q3’16, deal activity is down 21% when compared the same quarter in Q3’15 which saw 1,028 deals.
NEA MOST ACTIVE US EARLY-STAGE VC IN 2016: New Enterprise Associates was the most active early-stage VC firm in 2016 (through Q3’16) with investments in Catalytic, Paysa, VividCortex, and Virtru. The second spot was a tie between SV Angel and 500 Startups with other well knows names such as Andreessen Horowitz, Social Capital, and Upfront Ventures in the top 10.
INTERNET DOMINATING, MOBILE ON THE DECLINE: In Q3’16, the internet sector accounted for 62% of deal share and that has been consistent for several years. In contrast, mobile/telecom deal share dropped from 27% in Q3’14 to 22% in Q3’15 to 21% in Q3’16. Consumer products & services is on the rise accounting for 6% of deal share in Q3’16.
EARLY-STAGE DEALS MORE CONCENTRATED GEOGRAPHICALLY: In Q3’16, California, New York, and Massachusetts together accounted for 63% of deal share, an 11-quarter high.
EARLY-STAGE MEAN AND MEDIAN DEAL SIZES DOWN IN Q3’16: Q3’16 saw early-stage median deal sizes decrease 26% while mean deal size dropped 12% on a quarterly basis. Despite the declines compared to Q2’16, Q3’16 mean deal size reached the second-highest total in the 11-quarter trend with $3.2 million.
APPLOVIN WAS THE LARGEST EARLY-STAGE TECH EXIT IN 2016: Applovin, the San Francisco-based advertising technology company, raised just $4 million in disclosed funding before exiting for $1.4 billion in September 2016. Other large early-stage exits in 2016 include BlazeMeter, Orbitera, and EyeVerify, each of which were acquired for $100 million.
FOLLOW-ON MARKET TIGHTENING: Our analysis shows that it’s getting harder for seed and Series A-stage companies to obtain further financings, with the percentage of seed companies obtaining follow-on deals dropping from 57% in 2010 to 49% in 2013.
NOTE ON REPORT METHODOLOGY: Deals in this report only include technology Angel, Seed, and Series A fundings of companies with headquarters in the US. Funding analysis excludes deals from accelerators and incubators, as well as debt deals, into private companies. For questions regarding this methodology reach out to [email protected].
TABLE OF CONTENTS8
16
19
27
www.cbinsights.com 6
Overall venture capital trends
Follow-on equity funding trends
Top deals in specific categories (IoT, AI, Digital Health, etc.)
Most active VCs and top early-stage exits
Early-Stage Venture Capital TrendsEarly-stage financing activity, deal share, deal size, and more.
www.cbinsights.com 8
$1.0
39
$1,5
46
$1,1
77
$1,1
58
$1,1
78
$1,5
20
$1,5
42
$1,4
68
$1,5
48
$1,5
74
$1,6
87
$1,7
64
$1,8
74
$2,5
10
$2,1
48
$2,4
51
$2,0
04
$2,5
91
$2,4
03
$2,2
72
$2,2
80
$2,3
40
$2,2
90
548
635578
598
753
891856
791
885 910955
844
987 995
1087958
941993
1028
819957
721810
2011 2012 2013 2014 2015 2016
Investment ($M) Deals
EARLY-STAGE DEAL ACTIVITY SLIGHTLY IMPROVES IN Q3’16
On a quarterly basis, deal activity increased 12% in Q3’16, after falling to a 17-quarter low in Q2’16.
Funding slightly fell to $2.29B in Q3’16, a 2% decline over the previous quarter.
www.cbinsights.com 9
EARLY-STAGE US TECH INVESTMENTS DEALS AND DOLLARSQ1’11 – Q3’16
$0.9 $1.1 $1.0
$1.5
$1.0
$1.5
$1.1
$1.5
$0.7
$1.6
$1.2
$2.2
$2.9
$2.4
$2.8
$2.4
$2.9 $2.7
$3.1
$2.6
$3.6
$3.2
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Median Deal Size ($M) Mean Deal Size ($M)
BOTH MEAN AND MEDIAN DEAL SIZES DECLINE IN Q3’16
Overall mean deal size among early-stage US tech companies declined 11% on a quarterly basis in Q3’16, but was still the second-highest quarter by deal size since Q1’14.
Median deal size to early-stage US tech companies fell by 25% in Q3’16 to $1.2M.
www.cbinsights.com 10
EARLY-STAGE US TECH DEAL SIZE TRENDQ1’14 – Q3’16
$1.0
$0.8
$1.1
$0.7 $0.7
$0.9 $1.0
$1.2
$1.0
$0.8 $0.7
$1.8
$1.5
$2.0
$1.4
$1.1
$1.5 $1.6 $1.6
$1.5
$2.0
$1.4
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Angel Median Deal Size ($M)
ANGEL MEAN & MEDIAN DEAL SIZES PLUMMET
Median deal size for angel deals to US-based companies fell to $700K in Q3’16, the lowest quarterly total since Q1’15.
Mean deal size fell as well, decreasing to $1.4M, the lowest quarterly total since Q1’15.
www.cbinsights.com 11
US TECH ANGEL DEAL SIZE TRENDQ1’14 – Q3’16
$0.1
$0.3
$0.4
$0.8
$0.1
$0.5
$0.1
$0.7
$0.1
$0.5
$0.2
$0.7
$0.9 $0.8
$1.1
$0.8
$1.0 $0.9
$1.2
$0.8
$1.2
$1.0
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Seed Median Deal Size ($M) Seed Mean Deal Size ($M)
MEAN DEAL SIZE STAYS AT OR ABOVE $1M FOR TWO STRAIGHT QUARTERS
Both mean and median seed deal size to US-based tech companies fell in Q3’16. Mean deal size fell by 17% while median deal size fell by 60% on a quarterly basis.
www.cbinsights.com 12
US TECH SEED DEAL SIZE TRENDQ1’14 – Q3’16
$4.0
$5.0 $5.0 $5.0 $5.6
$5.3 $5.8
$5.5 $5.3
$6.0 $6.0 $5.9
$7.2
$6.3 $6.4 $7.0 $7.1 $7.1 $7.0
$7.3
$8.5 $8.3
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Series A Median Deal Size ($M) Series A Mean Deal Size ($M)
SERIES A MEDIAN DEAL SIZE STAYS FLAT IN 2016
In Q3’16, median deal size to US-based Series A-stage companies remained level at $6M.
Mean deal size slightly declined to $8.3M in Q3’16.
www.cbinsights.com 13
US TECH SERIES A DEAL SIZE TRENDQ1’14 – Q3’16
65% 64% 61% 61% 63% 61% 62% 63% 66% 61% 62%
24% 24%27% 25% 25% 24% 22% 21% 21%
23% 21%
2% 3% 2% 3% 3%4% 3% 5%
5% 7% 6%
6% 4% 5% 6% 7% 8% 8% 8% 4% 6% 7%2% 3% 3% 3% 2% 2% 2% 2% 2% 2% 3%2% 2% 2% 2% 1% 1% 2% 2% 1% 1% 2%
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Internet Mobile & TelecommunicationsConsumer Products & Services Software (non-internet/mobile)Computer Hardware & Services Electronics
INTERNET DOMINATES, CONSUMER PRODUCTS ON THE RISE
The internet and mobile sectors accounted for 83% of deal share to early-stage US-based technology companies in Q3’16.
The consumer products & services sector reached quarterly highs in Q2’16 (7%) and Q3’16 (6%) across the 11 quarter trend.
www.cbinsights.com 14
US EARLY-STAGE TECH INVESTMENTS BY SECTORQ1’14 – Q3’16
40% 41% 39% 39% 41% 38% 41% 40% 36% 38% 43%
15% 13% 16% 17% 14% 14% 15% 16%15% 14%
14%
6% 6% 5% 5% 7% 6%5% 5%
5% 5%6%
39% 40% 40% 40% 38%42%
38% 38%43% 42%
37%
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
California New York Massachusetts Other
THE THREE LARGEST US MARKETS ACCOUNT FOR MOST DEAL SHARE IN LAST 11 QUARTERS
In Q3’16, early-stage deal share in California was responsible for 43% of all deals in Q3’16. California accounted for more deal share than the next 47 states combined.
New York and Massachusetts accounted for 14% and 6%, respectively.
www.cbinsights.com 15
US EARLY-STAGE TECH INVESTMENT SHARE BY TOP STATEQ1’14 – Q3’16
Follow-On TrendsShare of companies that raised follow-on equity funding after their initial Seed or Series A round.
www.cbinsights.com 16
SEED COMPANIES SEE FOLLOW-ON FUNDING RATES FALL OVER THE LAST FOUR YEARSThe percentage of US-based seed-stage companies to raise follow-on equity funding has steadily declined. Of companies raising in 2013, 49% of companies raised funding after their seed round. That proportion was much higher at 57% in 2010.
www.cbinsights.com 17
% OF COMPANIES THAT RAISED EQUITY AFTER AN INITIAL SEED ROUND2010 – 2016 YTD (11/10/2016)
57% 58% 48% 49% 42%* 34%* 11%*
2010 2011 2012 2013 2014 2015 2016
2010 2011 2012 2013 2014 2015 2016 *It may take 18 months or more to raise follow-on equity funding.
FOLLOW-ON SERIES A FUNDING SHOWING SIGNS OF SLIGHT TIGHTENING67% of companies raised follow-on equity funding after raising Series As in 2011 and 2012. Since then, the number has stayed relatively consistent but dropping to 64% in 2013, with 2014 showing signs of a lower rate with 58% of companies raising follow-on equity financing so far.
www.cbinsights.com 18
% OF COMPANIES THAT RAISED EQUITY AFTER AN INITIAL SERIES A ROUND2010 – 2016 YTD (11/10/2016)
70% 67% 67% 64% 58%* 34%* 5%*
2010 2011 2012 2013 2014 2015 2016
2010 2011 2012 2013 2014 2015 2016*It may take 18 months or more to raise follow-on equity funding.
Top DealsThe largest US-based early-stage deals in AI, digital health, IoT, and more.
www.cbinsights.com 19
TOP EARLY-STAGE DEALS TO US TECH COMPANIES IN Q3’16
The top 10 US-based early-stage deals span a number of industries including cybersecurity, data storage, e-commerce, and fintech, among others.
www.cbinsights.com 20
$77M // Series A
$40M // Series A
$34M // Series A
$32M // Series A
$30M // Series A
$29M // Series A
$20M // Series A
$20M // Series A
$17M // Seed VC
Company Amount/Round Industry
Monitoring & Security
Security Software
Monitoring & Security
Data Storage
Application Development
CRM
Food & Grocery
Apparel & Accessories
Asset & Financial Management$18M // Series A
TOP EARLY-STAGE DEALS IN AI
www.cbinsights.com 21
Q3’16
Amount / Round: $9M / Series A
HQ: Sunnyvale, CA
Select Investor: Nexus Venture
Partners
Mezi is an artificially intelligent virtual
assistant for personal shopping and
travel needs.
Amount / Round: $8M / Series A
HQ: Seattle, Washington
Select Investor: Wildcat Venture
Partners
Amount / Round: $7.8M / Series A
HQ: San Jose, California
Select Investor: Khosla Ventures
Amplero is a customer lifetime value
management platform that enables
marketers to leverage machine
learning for customer lifetime value
and loyalty.
PatternEx is a threat prediction
cybersecurity platform powered by
artificial intelligence.
Docent Health is a health analysis
software provider that measures
patient results over time.
TOP EARLY-STAGE DEALS IN DIGITAL HEALTH
www.cbinsights.com 22
Avizia is a healthcare management
platform that focuses on
telemedicine solutions.
Amount / Round: $15M / Series A
HQ: Boston, MA
Select Investors: Bessemer
Venture Partners, New Enterprise
Associates, Maverick Ventures
Amount / Round: $8.5M/ Series A
HQ: Denver, CO
Select Investors: Norwest Venture
Partners, Point B Capital
NextHealth Technologies offers an
analytics platform that drives
down medical costs.
AristaMD is a referral
management software platform.
Amount / Round: $11M / Series A
HQ: Reston, VA
Select Investor: Blue Heron Capital
Amount / Round: $6.4M / Series A
HQ: La Jolla, CA
Select Investors: Avalon Ventures,
Correlation Ventures
Q3’16
Sense is a home monitoring system
that lets users understand the
energy output of every appliance
and device.
TOP EARLY-STAGE DEALS IN IOT
www.cbinsights.com 23
FogHorn offers software solutions
for industrial and commercial IoT
applications.
Amount / Round: $15M / Series A
HQ: Cambridge, MA
Select Investors: Shell Technology
Ventures, Energy Impact Partners
Amount / Round: $12M / Series A
HQ: United States (Stealth)
Select Investor: True Ventures
Brava creates a suite of connected
hardware products for the kitchen.
Amount / Round: $12M / Series A
HQ: Mountain View, CA
Select Investors: March Capital
Partners, GE Ventures
Q3’16
Civil Maps provides 3D mapping technology for autonomous vehicles.
TOP EARLY-STAGE DEALS IN AUTO TECH
www.cbinsights.com 24
Amount / Round: $6.6M / Seed
HQ: Berkeley, CA
Select Investor: Motus Ventures
Amount / Round: $2.5M / Series A
HQ: Ann Arbor, MI
Select Investors: GlenRock Israel, YL Ventures, Fontinalis Partners
Karamba Security is an autonomous security platform that protects a car’s external connected components.
Connected Signals brings real-time traffic light information to drivers while they are on the road.
Amount / Round: $990K / Seed
HQ: Eugene, OR
Select Investors: Tech Coast Angels, AutoTech Ventures
Q3’16
Cyence is an analytics platform that quantifies the financial impact of cyber risk.
TOP EARLY-STAGE DEALS IN INSURANCE TECH
www.cbinsights.com 25
Amount / Round: $40M / Series A
HQ: San Mateo, CA
Select Investors: New Enterprise Associates, Institutional Venture Partners
Amount / Round: $6.3M / Series A
HQ: Los Angeles, CA
Select Investors: ff Venture Capital, Romulus Capital
Estify offers a software platform that helps auto body shops create estimates on repairs for auto insurers.
Quilt is an online insurance provider for life, renters, and pets coverage.
Amount / Round: $3.3M / Seed
HQ: Boston, MA
Select Investors: Founder Collective, NextView Ventures, Titan Ventures, Eniac Ventures, Basset Investment Group
Q3’16
TOP EARLY-STAGE DEALS IN CYBERSECURITY
www.cbinsights.com 26
Virtru provides e-mail and file
encryption software.
Amount / Round: $15M / Series A
HQ: Sunnyvale, CA
Select Investors: Sequoia Capital
Israel, Shlomo Kramer
SafeBreach simulates hacks on
companies systems to help them
identify weaknesses in their
security systems.
ThinAir Labs offers enterprises a
set of automated protection
capabilities and alerts to keep
data safe and under control.
Amount / Round: $29M / Series A
HQ: DC, WA
Select Investor: Bessemer Venture
Partners
Amount / Round: $15M / Series A
HQ: Palo Alto, CA
Select Investors: Workday
Ventures, Y Combinator
Q3’16
Top VCs & ExitsMost active early-stage technology VC firms and some of the largest exits that last raised early-stage rounds before exiting.
www.cbinsights.com 27
MOST ACTIVE EARLY-STAGE VCS IN US TECH COMPANIES IN 2016
Some well-known names make our list of most active VC investors in 2016 through Q3’16. NEA took the number one spot with SV Angel and 500 Startups tied at the number two spot. Other investors include Andreessen Horowitz and Social Capital, among others.
www.cbinsights.com 28
RANK INVESTOR SELECT INVESTMENTS RANK INVESTOR SELECT INVESTMENTS
1 Catalytic, Paysa,VividCortex, Virtru
7Reflektive, Luma Home,
Within, Everlaw
2 Nucleus, SigOpt,B12, Sakara Life 10 AirMap, Front
Practice XYZ, Verifly
2 Embroker, Virool,ViralGains, Ripple 10
Loot Crate, Nima Sensor,Fame & Partners,
HopSkipDrive
4 Vettery, Shipt,PebblePost, HopSkipDrive 10 Gem, Booster Fuels,
Understory, GreatHorn
5 ShipBob, Skymind,Captain 401, AppZen 10 Lola Travel Company, B12,
AirMap, Ionic Framework
6 Inverse, Littlstar,AreaMetrics, Captiv8 10 Zendrive, Haven,
Troops, Arbor Technologies
7 LiveLike, Mozio,Wevorce, Wunder 10 AfterSchool, Robin,
Blispay, Cyberhaven
7 Catalytic, FourKites,Flywheel, Zipnosis
MOST ACTIVE VCS IN US EARLY-STAGE TECH COMPANIESQ1'16 - Q3'16
EXITED COMPANIES THAT LAST RAISED EARLY-STAGE FUNDING RANKED BY EXIT VALUE
Applovin, which was bootstrapped for the majority of its life, was the largest exit of a US-based tech company still at the early-stage in Q3’16. Other companies in the top 5 include BlazeMeter, Orbitera, and EyeVerify which each exited for $100M, respectively.
www.cbinsights.com 29
COMPANY EXIT VALUATION EXIT TYPE EXIT QUARTER
$1.4B Acquisition Q3'16
$185M Acquisition Q3'16
$110M Acquisition Q3'16
$100M Acquisition Q3'16
$100M Acquisition Q3'16
$100M Acquisition Q3'16
TOP COMPANIES THAT LAST RAISED EARLY-STAGE FUNDING BEFORE EXIT
EXITED COMPANIES THAT LAST RAISED EARLY-STAGE FUNDING RANKED BY EXIT VALUE
All five companies raised less than $12.2M in total disclosed funding before getting acquired for at least $100M+.
Some well-known acquirers of the companies here include Google, Salesforce, and Snap.
www.cbinsights.com 30
EARLY-STAGE COMPANIES WITH THE LARGEST VALUATION INCREASE When looking at early-stage valuation increases from Seed to Series A financing, we see that 3D printing company Formlabs, increased its valuation by more than 1680%. Other companies on the list include Stripe and Patreon, among others.
www.cbinsights.com 31
Seed Series A % Increase Current Status Description
$6 $1071683% Alive Designs and manufactures 3D printing systems.
$4 $68
1600% Alive Provider of mobile security solutions.
$10 $75650% Alive Offers a machine learning platform that helps
build predictive models.
$16 $104550% Dead
Infrastructure technology that allows subscribers access to vew live TV across any device or
platform.
$8 $51538% Alive Fundraising site that allows users to support
their favorite artists and creators.
$20 $100400% Alive/Unicorn Payment system that allows individuals and
businesses to accept payments over the internet.
(Swipe Labs)
$10 $50400% Alive Mobile application for watching a daily feed
of videos from the internet.
LARGEST EARLY-STAGE VALUATION INCREASE (DISCLOSED VALUATIONS)2011 - 2016 (Q3'16)
Where is all this data from?The CB Insights platform has details on all the 2016 early-stage deals included in this report
www.cbinsights.com 32
CLICK HERE TO SIGN UP FOR FREE