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Venture Capital Activity in the E-Commerce Industry 2013 YTD – December 2013

by Joel Coulson

  • 06 Dec 2013
  • PE
  • VC

Preqin’s Venture Deals Analyst indicates that there have been 589 venture capital deals in the e-commerce industry in 2013 so far, with an aggregate value of $5.2bn. 500 Startups was the most active investor during this period, investing in 24 deals. However, despite the greater activity, the aggregate value of these deals (including multi-investor deals) was just $30mn, placing them outside of the top 100 investors by aggregate value.

As of early December 2013, Andreessen Horowitz has invested the largest aggregate value in e-commerce deals, at $687mn, despite only investing in eight e-commerce deals in the year so far. This large disparity between the number of deals invested in by these firms and the aggregate value of these deals becomes even clearer when looking at the average deal sizes of Andreessen Horowitz and 500 Startups: $86mn and $1mn respectively. By delving further into the data, another indication to explain this disparity is shown through the stages both firms invested in: the majority (83%) of 500 Startups’ investments were in the Seed stage, whereas the majority (63%) of the deals Andreessen Horowitz invested were in later rounds, A-E, which typically command a larger investment.

The country that has received the most e-commerce investment during 2013 YTD is the US, with $2bn, followed by China with $800mn and India with $680mn. Out of 35 countries, these were the only locations to receive over $500mn. When comparing this data to 2012, only two countries raised over $500mn in that year: the US and China, with both raising the same as they have in 2013 YTD ($2bn & $800mn). However, in 2012 India raised substantially less, $400mn, through 66 deals, yet in 2013 YTD they are currently on $680mn with 65 completed deals. This has resulted in a significant 75% increase in average deal size, from $6mn in 2012 to $10.5mn in 2013 YTD.

Overall, 554 e-commerce deals in total were completed in 2012, with an aggregate value of $4.4bn. The most active firm in terms of number of investments was, again, 500 Startups, which completed 31 deals at an aggregate value of $54mn. The firm that invested the largest aggregate value in e-commerce deals was again Andreessen Horowitz, which was involved in 19 deals at an aggregate value of $1bn. Currently, both firms are investing less in 2013 when compared to the number and aggregate value of e-commerce investments they made in 2012.

The largest e-commerce venture capital deal in the period January to early December 2013 came from Kingdom Holding Company, which invested SAR 1,500mn ($400mn) of additional Series D funding in 360Buy, a Chinese e-commerce firm which offers consumer electronic products. 500 Startups’ biggest e-Commerce deal this year was a $7.1mn multi-investor deal in Zozi, a discount e-Commerce business. One of Andreessen Horowitz’s largest deals this year was a $150mn Series D investment, joined by seven other institutional investors, in Fab.com, a homeware e-commerce business.

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