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Venture Capital Investments in the US – May 2014

by Jonathan Parker

  • 07 May 2014
  • PE
  • VC

In the year to date, there have been over 1,250 venture capital financings in the US, valued at an aggregate total of $16.6bn. Of these investments, almost a quarter (23%) have been in companies operating in the internet sector, another 22% directed towards software companies and a further 18% for companies focusing on healthcare. Preqin’s Venture Deals Analyst online service shows that these three industries have continually received the highest volume of venture capital investments through the years, with 63% of the 25,000 US venture capital financings since 2007 provided to internet, software and healthcare companies. Although the collective proportion of the aggregate value of investments comprised by these three industries has remained fairly constant at 60%, it is worth noting that the split is not equal. Over the last 7 years, 27% of all venture capital dollars have found their way into healthcare companies, compared to 18% in internet and 15% in software firms, highlighting the relative capital intensity of the healthcare industry. 

Despite a 5% fall in the number of US venture capital investments in the first four months of the year compared to the same period in 2013, the aggregate value of deals, at $16.1bn, is 72% higher than the January to April 2013 total. Although the fall in the number of deals follows on from a 9% drop between 2012 and 2013, the aggregate value this year is already more than half the total value of US investments in 2012 and 2013. This suggests a reversal of the declines in value from 2011 to 2013, and this is mirrored in Preqin’s data on average values, which have increased across all stages since last year. 

While angel/seed deals and Series A investments have seen increases of 23% and 4% respectively since last year, it is the later stages that have seen the most notable changes. The average value of Series C investments in the year to date stands at $32.8mn – 52% above the 2013 average ($21.6mn) and significantly higher than any other year in the period 2007 to present. Investments in the US classed as Series D and later have averaged $63.5mn in 2014 so far, which is 107% above the 2013 level ($30.8mn) and again eclipses the average value of any other year since 2007.

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