Venture Capital 3Q 2015: US at $19bn; China $14bn; Europe €3bn
Venture Capital investments in 3Q 2015 tracked by Dow Jones VentureSource, a sister company of The Wall Street Journal show that US firms raised $19bn, Chinese firms raised $14bn and European firms raised €3bn.
US based firms raised $19bn in 191 deals in the quarter — a 3% rise in capital compared with the second quarter and a 11% dip in deals.
Compared with Q3 2014, capital invested jumped 68% while the number of deals fell 5%. Business and Financial Services was the biggest category with a 28% share. Consumer Services accounted for a 26% share or $5bn.
12 venture capital (VC)-backed companies raised almost $1.6bn through initial public offerings (IPO). The number of deals fell 56% and the capital raised dipped 37% from $2.5bn.
SunRun was the biggest and listed on Nasdaq, raising $244m.
Chinese firm investments reached a record since VentureSource began tracking them in 2006. $14bn was raised in 413 deals in the quarter — a rise of 39% in capital invested and 8% in deals since 2Q.
Compared with 3Q 2014, the rise in dollars invested more than tripled while deal flow increased by 40%.
Consumer Services were the most popular category in 3Q in attracting investment of $10bn while IT raised $1.7bn. 2 VC-backed IPOs occurred and both deal numbers and dollars raised plunged 96%.
The largest listing was by Harmonicare Medical Holdings in Hong Kong and it raised $187m.
European companies raised over €3bn for 355 deals during 3Q 2015, a minimal increase in the amount raised from 2Q 2015 despite a 5% slide in the number of deals completed.
In contrast with the year ago period, both investment and number of completed deals improved, respectively by 31% and 1%. Consumer Services (€935m) was the strongest sector of the quarter in terms of attracting investment followed by Healthcare (€929m).
The United Kingdom was the most favoured destination for equity financing during 3Q 2015, receiving €947m across 87 deals. The country took 31% of all equity financing for the quarter, despite a 9% decrease in deal flow from 2Q 2015. France placed second, attracting a 19% share of European financing. Investment reached a total €567m, a 29% rise in capital invested, despite a 22% drop in number of deals.
Germany occupies third position raising €428m, 14% of the total for the quarter. Switzerland placed fourth with a 6% share, raising €194m during 3Q 2015.
8 VC-backed IPOs took place during 3Q 2015, a fall in number of deals both to the prior quarter and the previous year. IPOs raised almost €700m during 3Q 2015, an increase of 31% from the €533m raised in 2Q 2015.
VC-backed companies also raised an higher amount through IPOs when compared with the year ago period (€ 447m). The largest European VC-backed IPO of 3Q 2015 was the Flow Traders listing in July. The company raised €521m for its offering on the Amsterdam Exchange Index.
In Monday's FT John Thornhill, deputy editor, (link is broken) says that a report by GP Bullhound, a British investment bank, identified 40 European start-ups valued at $1bn or more — so-called unicorns — in 2014, compared with 30 a year earlier. The UK — which has emerged as a centre for fintech — leads with 17 unicorns, with six in Sweden and four in Germany.
He says Europe’s challenge is to expand such promising $1bn start-ups into $10bn companies and establish new global platforms. There is a long way to go. In June, the combined value of Europe’s 40 unicorns came to about $120bn, less than half the current market value of Facebook. According to a study by CBInsights, only one European unicorn (Spotify) ranks in the top 20 most valuable start-ups in the world, compared with 12 from the US and five from China.