Venture Capital 2013: Financing
provided by venture capital for young companies -- mainly in the high tech
sector - - last year amounted to $33bn in the US; $7.1bn in Europe; $3.5bn in
China and $2.3bn in Israel.
In Ireland VC financing amounted to
$364m in 2014 and in recent years the Irish Government has invested about
$300m in VC funds.
wrote last year: "IN THE world of startups the rule
of thumb is that young American firms raise twice as much money in each round of
financing as European ones—and twice as fast. "
In the US venture capital has
accounted for the early financing of only about 1% of America's currently active
A total of 2,277 private tech
companies from around the globe were acquired in 2012, according to research
firm CB Insights. However, 76% of these firms had not
raised venture capital or private equity.
CB Insights said the value of most
of the acquisitions was never disclosed by the buyer. However, 331 of the
buyouts were made public, and totalled $46.8bn during the year.
Over 50% of the companies were acquired for less than $50m, and 80% of the
startups sold in 2012 went for less than $200m. Just eight were valued at $1bn
The Wall Street Journal's CFO
said last month that only 34% of US startups that received seed funding
13 months ago are receiving follow-on financing, according to data through
October from CB Insights. That’s down from about 40% in the previous four years.
And while the number of seed-financing deals increased by 46% between 2009 and
2013, follow-on financing hasn’t kept up, increasing by just 14% over the same
period, according to Dow Jones VentureSource.
Dow Jones VentureSource says that a total of €5.6bn was raised during 2013 as a
whole in Europe, an improvement of 15% on 2012 and 7% on 2011. In terms of deal
flow, 1,395 were completed in 2013, equating to an increase of 6% on 2011 and
In 2013 as a whole, the UK took a
29% share of investment (€1.6bn), Germany an 18% share (€992m), and France
received a 14% share (€785m).
The Consumer Services sector
received the largest allocation of investment during 4Q’13 (37%), accumulating
€553m through 106 deals, an increase of 136% from 3Q’13 in capital raised
despite deal flow remaining level.
Healthcare placed second in terms of
equity financing, taking a 27% share of all 4Q’13 investment. The sector raised
€392m across 55 deals, a rise of 23% and 31% from respective 3Q’13 figures.
Business and Financial Services
occupies third, with companies gathering a 15% share of the total amount
invested during the quarter. The sector received €223m across 92 deals, an
uptick of 3% in deal flow but a drop of 29% in capital raised from 3Q’13.
The Consumer Services sector placed
first for euros raised during all of 2013, with €1.5bn equating to a 28% share
of investment for the year. Healthcare companies raised €1.4bn giving the sector
a 25% share, while the Information Technology sector
placed third with a 19% share of investment (€1.1bn).
Investment into Chinese venture-backed companies markedly improved in 4Q’13, as
companies raised $1.5bn from 106 deals. The gains equate to a 76% increase in
capital and a 16% increase in number of deals from the previous quarter.
314 deals were completed for
China-based VC-backed companies during 2013 as a whole, up 20% on the figure for
2012 but dropping 22% on the number completed during 2011. In terms of capital
raised, $3.5bn were accumulated during 2013, representing an overall decline of
29% from 2012 and 45% from 2011.
The IVC Research Center reports that 2013 was a record-breaking one with 662
Israeli high-tech companies closing financing rounds. Companies raised $2.3bn –
the highest amount in the past 10 years and second only to the $3.1bn raised by
local startups in 2000.
Three hundred and ninety-five
VC-backed deals attracted $1.7bn or 74% of the total amount raised in 2013, just
above the 72% of 2012, but well lower than the 83 and 87% reached in 2011 and
Eighty-four foreign VC funds made at
least one first investment in Israel in 2013, an 11% increase compared to 2012’s
76, and a substantial 223% increase from 2009 levels. And while foreign
investors increased their activity in Israel, Israeli VC funds’ first
investments dropped to near 2009′s level, with only 38 Israeli VC funds making
at least one first investment. Of 255 first investment deals made in 2013 only
111, or 44%, were made by Israeli VC funds.
Dow Jones VentureSource says in 2013, 3,480 deals - - less that 1% of the number
of firms with employees that were founded in 2011 - - have been completed
raising $33bn, respectively a 5% decrease and 1% increase on figures posted in
Business and Financial Services saw
the largest investment allocation, with 207 deals garnering $2.3bn and
accounting for 26% of total equity investment.
The Healthcare sector raised the
second highest proportion of investment for 4Q’13. Healthcare companies drew
$2.3bn across 188 deals, up 20% and 11% from respective 3Q’13 figures.
Information Technology (IT) placed
third with $1.7bn in 248 deals, dropping significantly from the $2.4bn
accumulated in the previous quarter. The sector’s investment figure represents a
19% share of total equity investment into U.S. VC-backed companies for the
$1.6bn were raised by Consumer
Services in 177 deals, an increase of 9% in deal flow, while capital invested
went up by 3%.
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