2008 YEAR IN REVIEW
On a daily basis, TechCrunch is devoted to breaking news and profiling new products, companies and events in technology. The Year in Review is our attempt to take a step back and provide a lens through which to evaluate the major trends of 2008. This report covers product development, financings and exits across a variety of technology sectors – search, social networking, cloud computing, mobile communications, ecommerce, and new media. CrunchBase is our newest tool for entrepreneurs and investors looking for information on the most significant companies and people in the technology business, and it is the source for much of the data discussed.
Contents
Executive Summary....................................................................................................................................... 4 TechCrunch Takeaways: Key Trends & Innovations .................................................................................... 7 2008 Highlights ......................................................................................................................................... 7 Search (i.e. Google) Funds the Ecosystem ................................................................................................ 8 Google ................................................................................................................................................... 9 Yahoo! ................................................................................................................................................... 9 Microsoft ............................................................................................................................................... 9 Search Start-Ups ................................................................................................................................... 9 Search Still Dominates Internet Advertising ........................................................................................... 10 Social Media and Activity Streams .......................................................................................................... 12 Facebook and MySpace: Huge and Growing ..................................................................................... 12 Facebook and MySpace Ad Platforms ................................................................................................ 12 Facebook, Google and MySpace Open Identities with the Web ........................................................ 13 MySpace Music Launch ....................................................................................................................... 13 Twitter, FriendFeed and Other Social Media Streams ........................................................................ 14 The Professionalization of Online Video ............................................................................................. 14 iPhone Transforms the Mobile Environment ......................................................................................... 15 Cloud Computing Platforms and Applications ........................................................................................ 16 Amazon ............................................................................................................................................... 16 Microsoft ............................................................................................................................................. 17 Google ................................................................................................................................................. 17 Cross-Cloud Computing ...................................................................................................................... 18 Start-Up Launch Highlights ......................................................................................................................... 19 Launch Summary..................................................................................................................................... 19 New Companies Founded & Funded in 2008 ......................................................................................... 21 New Companies Founded in 2008 w/o Completed or Disclosed Financing ........................................... 25 Venture Financing Review .......................................................................................................................... 62 Fundraising Summary ............................................................................................................................. 62 Cleantech ................................................................................................................................................ 70 Social Networking ................................................................................................................................... 71 Ecommerce ............................................................................................................................................. 73 TechCrunch Research © All Rights Reserved Page | 2
Mobile and Wireless ............................................................................................................................... 74 Consumer Web Media ............................................................................................................................ 77 Advertising .............................................................................................................................................. 78 Entertainment ......................................................................................................................................... 79 Enterprise ................................................................................................................................................ 80 Software .................................................................................................................................................. 81 Hosting .................................................................................................................................................... 82 Search...................................................................................................................................................... 83 Networking.............................................................................................................................................. 83 Consumer Electronics ............................................................................................................................. 84 2008 Venture Financings: Table of Angel Rounds .................................................................................. 87 2008 Venture Financings: Table of Seed Rounds.................................................................................... 90 2008 Venture Financings: Table of Series A Rounds ............................................................................... 95 2008 Venture Financings: Table of Series B Rounds ............................................................................. 103 2008 Venture Financings: Table of Series C Rounds ............................................................................. 109 2008 Venture Financings: Table of Series D Rounds ............................................................................ 112 2008 Venture Financings: Table of Late-Stage Rounds ........................................................................ 113 2008 Venture Financings: Financings Unattributed to Rounds ............................................................ 114 Mergers & Acquisitions ............................................................................................................................. 117 Top Multi-Deal M&A Buyers 2008 ........................................................................................................ 120 Top Multi-Deal M&A Buyers 2007 ........................................................................................................ 121 2008 M&A Transactions: $100M+ ....................................................................................................... 122 2008 M&A Transactions: $10-100M .................................................................................................... 123 2008 M&A Transactions: Under $10M and Not Disclosed .................................................................. 124 IPO Market Summary ................................................................................................................................ 129 DeadPool ................................................................................................................................................... 132 LayOff Tracker ........................................................................................................................................... 134 2009 Punch List ......................................................................................................................................... 141 Disclaimer and Feedback .......................................................................................................................... 143
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Executive Summary (preview page 1 of 3)
2008 was a year many investors would like to forget. As the year drew to a close, the S&P500 ended down 38.49% and the tech-heavy Nasdaq Composite Index had fallen 40.5%, marking the worst-singleyear performance in its history. Despite the panic in financial markets, innovation on the web continued. Social networking leaders Facebook and MySpace added 145 million unique visitors between them over the course of the year. Twitter hit 1 billion “tweets”. Google launched a new phone OS – Android – on handsets from T-Mobile. Apple delivered on the original promise of the iPhone with an upgraded version capable of running on the latest 3G networks. While our pockets may all be lighter than they were on January 1, 2008, innovation and technical progress continues to permeate our personal and professional lives online. Here are some highlights of the year in tech that you will find throughout this report: Start-Up Launch Highlights: CrunchBase recorded 1,422 new companies formed in 2008. Over 1,000 companies were founded through August. Then the number of new start-ups declined precipitously each month from September through year-end. 1,276 new start-ups have not raised or disclosed financing rounds in 2008. 146 new start-ups received $146M in aggregate angel, seed, and series A financing. The average number of months between founding and financing was 3.8 months.
Venture Highlights: CrunchBase recorded over 1,100 financing transactions representing $13 billion in venture financing, approximately 50% of total capital raised in 2008. (CrunchBase data is still accumulating in clean tech, healthcare, and international categories.) Transaction volume followed a rough bell curve-- approximately 20% of deals were angel and seed round, 60% were Series A and B and 20% were Series C or later-stage rounds. Average round sizes: $0.6M for seed rounds, $1.2M for angel rounds, $6.3M for series A, $11.1M for series B and $20.4 for series C rounds. Later-stage financing averages were $26.4M for series D and $36.5M for series E rounds. The top 10% of deal flow captured 50% of capital raised (133 deals raised over $25M, totaling $6.9B.) The most heavily invested sectors were clean tech, social networking, ecommerce and mobile, which each received $1B or more in venture. Venture activity declined as the year progressed and US markets fell. Deal flow through September averaged over $1B and 100 financings per month. By December, activity was nearly half, or $600M invested in 50 deals. that raised $100 million or more in 2008: Iridium ($500M), Xiaonei ($430M), Nanosolar
The healthy quarters of 2008 showed some aggressive raises. CrunchBase counted 9 companies
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