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Useful Stats: Venture Capital Investment Has Strongest Quarter Since 2001
Anchored by the largest ever investment since the MoneyTree Report began covering venture capital investment in 1995, the $13 billion total dollars invested in the second quarter of 2014 marks the largest total quarterly investment since $13.1 billion was invested in the first quarter of 2001, according to new data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC) MoneyTree survey. Likewise, the $22.7 billion invested in the first half of 2014 is the highest first half total since 2001.
Between Q1 and Q2 of 2014, investment activity rose 34 percent in dollar terms and 13 percent in number of deals. First half investments in 2014 were 71 percent greater in dollars and 9 percent greater in number of deals than the first half of 2013.
The $6.1 billion invested in the software industry in the second quarter marks just the fourth time since 1995 that dollars invested in the industry eclipsed $6 billion in a single quarter. Five of the largest 10 deals of the quarter occurred within this industry, led by the $1.2 billion deal from a consortium of investors for Uber, a transportation-software firm. Uber, whose smartphone app allows users to hail cars driven by both professional and nonprofessional drivers, received an $18.2 billion valuation last month and is used in more than 130 cities.
With $1.8 billion going into 122 deals, the biotechnology industry was the second largest sector for dollars invested in the second quarter. Compared to Q1 2014, total dollars invested rose 69 percent while number of deals grew 7 percent in the second quarter. Total dollars invested in the second quarter decreased in nine of the 17 MoneyTree industries, led by a 69 percent decrease in business products and services dollars invested between the first and second quarter.
The average seed stage investment was $3.4 million, up from $2.8 million in the first quarter of 2014, while the average early stage investment deal was $7.3 million, up from $6.8 million in the previous quarter. Investments in later stage deals accounted for $3.2 billion going into 229 deals in the second quarter, an increase of 25 percent in dollars and 19 percent in deals from quarter one.
Download the NVCA/PWC release…
SSTI has prepared tables of U.S. venture capital investment levels by state in terms of deals and dollars for each quarter between Q1 2012 and Q2 2014.
California remains the country’s leader in investment dollars, number of deals, and investment dollars per deal. Massachusetts and New York again follow, as Massachusetts ranked second in investment dollars and New York ranked second in number of deals. Washington state had the fourth highest total of investment dollars, after experiencing a growth of 108 percent compared to total dollars invested in the first quarter of 2014. The top four states also exhibited the largest change in total investment dollars between the year’s first two quarters.
Despite starting 2014 off slowly, several states have shown promise in the second quarter. After experiencing just one venture capital deal worth $891,000 in the year’s first quarter, three deals in South Carolina totaled more than $38 million in the second quarter. Although Missouri had just five deals in Q2 compared to twelve in Q1, the state saw over $78 million in total investment during the second quarter – an increase of 1338 percent! This suggests that although in the first quarter more Missouri firms were able to attract venture capital, the firms that were able to attract investment in the second quarter were able to attract considerably more. Three states – Alabama, Montana, and Mississippi – have yet to witness a venture capital deal in 2014.
SSTI will take a closer look at the NVCA/PWC data in the coming weeks, including state share of total U.S. venture capital, per capita investment, investment by industry and investment in stage.
U.S. Venture Capital Investment Dollars by State, Q1-Q2 2014
| Q1 2014 | Q2 2014 | % Change (Q1-Q2, 2014) | ||||
|---|---|---|---|---|---|---|
| STATE | Deals | Amount | Deals | Amount | % Change Deals | % Change Amount |
| AL | N/A | N/A | N/A | N/A | N/A | N/A |
| AR | N/A | N/A | 3 | 4,000,000 | N/A | N/A |
| AZ | 8 | 39,289,000 | 7 | 52,257,100 | -12.5% | 33.0% |
| CA | 427 | 5,684,949,900 | 465 | 7,954,589,200 | 8.9% | 39.9% |
| CO | 22 | 112,816,600 | 20 | 150,799,000 | -9.1% | 33.7% |
| CT | 11 | 196,574,800 | 19 | 119,744,000 | 72.7% | -39.1% |
| DC | 5 | 22,276,200 | 11 | 90,350,900 | 120.0% | 305.6% |
| DE | 1 | 1,000,000 | 1 | 2,500,000 | 0.0% | 150.0% |
| FL | 13 | 71,972,100 | 13 | 112,902,500 | 0.0% | 56.9% |
| GA | 11 | 118,228,000 | 21 | 147,297,100 | 90.9% | 24.6% |
| HI | 2 | 271,000 | 1 | 350,000 | -50.0% | 29.2% |
| IA | 1 | 600,000 | N/A | N/A | N/A | N/A |
| ID | N/A | N/A | 2 | 1,873,000 | N/A | N/A |
| IL | 25 | 237,460,200 | 25 | 185,017,800 | 0.0% | -22.1% |
| IN | 6 | 15,834,900 | 3 | 6,522,000 | -50.0% | -58.8% |
| KS | 3 | 15,041,000 | 2 | 1,300,000 | -33.3% | -91.4% |
| KY | 1 | - | 1 | 15,000 | 0.0% | |
| LA | 1 | 375,000 | N/A | N/A | N/A | N/A |
| MA | 85 | 939,535,700 | 112 | 1,149,645,700 | 31.8% | 22.4% |
| MD | 17 | 69,877,100 | 21 | 64,322,700 | 23.5% | -7.9% |
| ME | 2 | 758,000 | 2 | 16,086,000 | 0.0% | 2022.2% |
| MI | 14 | 37,633,400 | 11 | 121,977,400 | -21.4% | 224.1% |
| MN | 11 | 83,406,100 | 8 | 104,544,400 | -27.3% | 25.3% |
| MO | 12 | 5,455,900 | 6 | 78,482,000 | -50.0% | 1338.5% |
| MS | N/A | N/A | 1 | - | N/A | N/A |
| MT | N/A | N/A | N/A | N/A | N/A | N/A |
| NC | 11 | 59,118,100 | 10 | 31,975,100 | -9.1% | -45.9% |
| ND | 1 | 500,100 | ||||
| NE | 3 | 2,674,000 | 4 | 2,016,000 | 33.3% | -24.6% |
| NH | 3 | 28,518,200 | 1 | 3,435,000 | -66.7% | -88.0% |
| NJ | 5 | 19,561,000 | 6 | 83,026,300 | 20.0% | 324.4% |
| NM | 4 | 5,033,000 | 1 | 3,000,000 | -75.0% | -40.4% |
| NV | 2 | 4,206,000 | 2 | 15,293,000 | 0.0% | 263.6% |
| NY | 99 | 728,278,100 | 116 | 1,050,183,200 | 17.2% | 44.2% |
| OH | 20 | 49,504,100 | 13 | 41,541,000 | -35.0% | -16.1% |
| OK | 2 | 2,335,000 | 3 | 7,550,100 | 50.0% | 223.3% |
| OR | 5 | 63,674,000 | 6 | 49,543,000 | 20.0% | -22.2% |
| PA | 27 | 178,756,100 | 48 | 200,889,000 | 77.8% | 12.4% |
| PR | N/A | N/A | N/A | N/A | N/A | N/A |
| RI | 3 | 20,250,000 | 4 | 31,625,000 | 33.3% | 56.2% |
| SC | 1 | 891,000 | 3 | 38,840,000 | 200.0% | 4259.1% |
| SD | 1 | 3,001,000 | N/A | N/A | N/A | N/A |
| TN | 10 | 11,642,000 | 13 | 32,549,100 | 30.0% | 179.6% |
| TX | 41 | 345,824,200 | 47 | 354,424,200 | 14.6% | 2.5% |
| UT | 8 | 212,657,000 | 10 | 148,719,800 | 25.0% | -30.1% |
| VA | 26 | 128,416,800 | 24 | 91,039,000 | -7.7% | -29.1% |
| VT | 3 | 1,574,000 | 5 | 29,463,000 | 66.7% | 1771.9% |
| WA | 26 | 172,433,100 | 32 | 359,233,100 | 23.1% | 108.3% |
| WI | 7 | 18,217,900 | 8 | 27,836,300 | 14.3% | 52.8% |
| WV | N/A | N/A | 2 | 1,570,900 | N/A | N/A |
| Grand Total | 985 | 9,709,919,500 | 1,114 | 12,968,828,000 | 13.1% | 33.6% |
072514.xlsx