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Venture Capital Investments in the Digital Media Sector - October 2014

by Emily Forbes

  • 24 Oct 2014
  • PE
  • VC

According to Preqin’s Venture Deals Analyst, there have been 329 venture capital deals globally in the digital media industry since 2007, with an aggregate value of $2.6bn. As can be seen in the figure below, the number of deals in the digital media sector has increased year-on-year since 2010, from 34 deals to 57 deals completed in 2014 YTD. The aggregate value of digital media deals follows a similar trend; however, there was a slight decrease in 2013 before a strong resurgence in 2014 to date, which has seen $716mn in deal value compared to $277mn last year. 

In conjunction with increases in absolute number and aggregate value, the digital media industry has also seen a strengthening in its relative significance. This year, the sector has accounted for a higher proportion of the number of venture capital deals globally than for any other year since 2007, while the aggregate value of venture capital deals attributable to digital media investments is above 1% for the first time since 2010. 

Venture capital financings in North America have accounted for 68% of the number of digital media deals in 2014 YTD, slightly higher than the 63% of all deals globally that North American venture capital financings, across all sectors, have accounted for. The aggregate value of digital media deals in North America in the same time period contributed 86% to the global value, which was significantly higher than the 65% that North American venture capital deals accounted for with regards to all industries. 

India has recorded the second largest aggregate deal value for digital media in 2014 YTD, at $41mn (6% of the global total), in contrast to North America’s $615mn. Since 2007, however, Greater China recorded the second largest regional aggregate deal value, at $384mn (15%) of the $2.6bn total, in contrast to North America’s $1.9bn. 

Series A financings account for the largest proportion of the number of deals that have taken place since 2007 in the digital media industry. There have been 62 deals with an aggregate value of $393mn, contributing 17% of the total number and 14% of the aggregate value of all digital media deals. In 2014 YTD, angel/seed financings, which account for 21% of the global total number of venture capital deals across all industries, account for only 13% of all venture capital deals within the digital media industry, suggesting that the sector does not feature as highly among early stage investors. 

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