Venture Capital Activity Report | Q2 2010
Q2 2010 – Venture Capital Activity Report
TABLE OF CONTENTS
QUARTER SUMMARY 2
QUARTERLY TRENDS 3
SECTOR REVIEW 11
1 INTERNET 11
2 HEALTHCARE 16
3 GREEN / CLEAN TECH 21
GEOGRAPHIC REVIEW
1 CALIFORNIA 26
2 MASSACHUSETTS 31
3 NEW YORK 35
4 WASHINGTON 40
5 TEXAS 44
Q2 2010 MEDIAN DEAL VALUES 48
DEFINITIONS & DATA INTEGRITY 49
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2 Venture Capital Activity Report | Q2 2010
Q2 2010 – This Quarter in Venture Capital
Funding levels approaching the new normal? Given increasing concentration of deals
and dollars within certain geographies and sectors, is VC becoming less diverse?
At $5.9B of venture capital funding over 612 deals, Q2 2010 gives credence to the idea that venture funding may be
settling into a “new normal”. A tepid climate for venture capital fundraising has pundits (and even some investors)
commenting that $20 to $25B may ultimately a more sustainable level for the VC industry. The trailing four quarters of CB
Insights data comes in at about $23.4B suggesting these prognostications may be right.
If this is the case, we wonder if it‟s time to reset our expectations? Are the near $30B totals seen during the glory days of
just a few years ago now relics of a simpler, happier time?
While you ponder that, here are some of the other highlights of Q2 2010‟s venture capital activity.
Is Venture Capital Primarily a 3 State Game? Clean Tech Continues Its Wild Ride
Based on just this quarter‟s data, it looks like that. Of all sectors, green tech sees the largest fluctuations in
California, Massachusetts and New York represented venture funding (usually based on the presence or lack of
65% of the quarter‟s deals and 70% of funding. Both a few large deals). This quarter was no different with
figures represent the highest concentrations going to the funding dipping 20% vs. Q1‟10. Deal count also sank
three states in the last five quarters. 35%. Solar and bio-energy saw the most green.
Early Stage Ups Share of Deals / Declines on Dollars California Takes Over 50% of Total Venture Dollars
Early stage deals represent almost 42% of VC deals in The Golden State breaks the $3B funding mark with over
the quarter and only 18% of funding. The trend towards half of that for Healthcare and Internet companies. Cali
more small deals continues. early-stage jumped 35% vs. the prior quarter.
VC Seed Investments are the New Series A Mass’ Share of National Venture Deals & Dollars Up
The greater number of small deals was most clearly Over the last five quarters, Massachusetts‟ companies
visible with the increase in the number of deals deemed have increased their share of venture dollars and deals.
Seed VC deals. With large existing funds and new Healthcare remains the state‟s cornerstone with internet
smaller funds emerging to make bets on earlier-stage and mobile also up. Early stage was also healthy
companies, Seed VC rounds continued their strength. representing 25% of total funding.
Traffic to Internet Deals Bustling New York: Internet or Bust
Internet deals and dollars were at the highest levels Unlike Cali and Mass which have some diversity amongst
seen in last five quarters. Industries within internet sectors of VC investment, NY is mostly about the internet.
sector receiving investment were quite diverse ranging Over 70% of deals and dollars went to internet companies
from games to social to ecommerce showing representing a 25% increase in deals over Q1‟10.
opportunities. Ecommerce on track to eclipse levels
seen in 1999. Washington Climbing Back
An Uncertain Diagnosis for Healthcare Funding climbs 53% vs. prior quarter but still down 23%
vs. year ago. Deal count hold steady in recent range.
Deal count flat vs. year ago but funding down 17%. Healthcare dominates funding and deal count.
California increases its share of healthcare dollars on
back of later-stage deals. Medical devices which have Texas Sees More Green While Going Green
been steadily increasing since 2004 vs. other healthcare
categories such as biotechnology and pharmaceuticals Texas funding grew by 58% vs. last year and nearly
continued to extend their lead. doubled deal count. Nearly 50% of funding in the state
went to green/clean tech focused on renewable
technologies.
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3 Venture Capital Activity Report | Q2 2010
$5.9B over 612 Deals – “New Normal” for Funding Levels?
Funding levels stay in tight range over last four quarters. Deal count flat and funding
up 10% vs. year ago levels. Dollars hold steady but deal count drops 19% vs. Q1‟10.
VC Investment and Deal Volume Trend
731
678 687
603 613 612
483 $6.1
$5.9 $5.9 $5.9
$5.3 $5.5
$3.9
Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($B) # of Deals
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4 Venture Capital Activity Report | Q2 2010
The Big 3 Get Bigger – Cali, Mass and NY See More Deals
Mass and Cali both see significant growth in deal share YoY. NY also sees modest
YoY increase. Overall, venture deals increasingly concentrated in the big 3.
Share of Venture Deals Across Top 3 States
6% 8%
6%
8%
11% 13% 14%
7%
12%
9%
45% 44% 43%
36% 41%
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
California Massachusetts New York
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5 Venture Capital Activity Report | Q2 2010
The Big Three Also Capture More of VC Funding Pool
Akin to deals, Mass and Cali increasing share of venture dollars YoY. NY slips versus
last year. Overall, big three states represented 70% of dollars vs. 59% last year.
Share of Venture ($) Across Top 3 States
4% 5% 6%
5%
10%
15% 12%
7% 12%
9%
56% 52%
43% 49% 49%
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
California Massachusetts New York
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6 Venture Capital Activity Report | Q2 2010
What Smart Investors, Bankers and
Wealth Managers Use to Get Ahead…
With CB Insights you can access deep private company info that was once exclusively
available behind prohibitively expensive paywalls.
CB Insights is accessible for free by visiting http://www.cbinsights.com
73,000+ Private Company Profiles. Coverage Universe
Over 73,000 high value private
company profiles across industries and • Venture Capital – 1999 to present
sectors. Medical devices to • Angel Investment
mobile. Industrial to internet. • Private Equity
• Federal SBIR Grants – 3 years
• State Grant Programs
From Angel to Private Equity. • Incubators – Over 300
Angel investment to venture capital to • Middle Market Private Companies
private equity to government funding to
under the radar mid-market private Sector Coverage
companies.
• Green/clean tech
• Internet
Company & Investor Updates via Email. • Mobile & Telecom
• Software
Add companies and investors of • Energy & Utilities
interest to your CBI Watchlist and get • Computer Hardware & Services
notified of changes and updates • Healthcare
automatically. • Industrial
• Automotive & Transportation
Management & Board Information • Business Products & Services
• Consumer Products & Services
Add companies and investors of • Electronics
interest to your CBI Watchlist and get • Environmental Services &
notified of changes and updates Equipment
automatically. • Financial Services
• Food & Beverages
• Leisure
Analytics & Reporting • Media
• Metals & Mining
Downloadable reports and analytics
• Retail
which allow you to manipulate data
• Risk & Security
when and how you want to.
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7 Venture Capital Activity Report | Q2 2010
VCs Take a Breather After Q1‟10s Blistering Deal Pace
Funding levels remain similar to Q1‟10 but deal count off due to sluggish April and
May. Large later-stage fundings and an active June helped drive funding level.
VC Investment and Deal Volume by month, Q210
244
190 $2,545
178
$1,686 $1,639
Apr-10 May-10 Jun-10
$ Investment # Deals
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8 Venture Capital Activity Report | Q2 2010
Seed is the New Series A and Series B+ Funding Booms
Portion of early stage deals grows by 28% vs. Q1‟10. Seed VC grows aggressively.
Series B+ represented 82% of funding vs. 65% in prior quarter.
VC Deal Volume (#) by Series, Q210
4% 9% Seed
12%
Series A
Series B
18% 33%
Series C
Series D
24% Series E +
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VC Investment ($) by Series, Q210
1%
6% Seed
17%
Series A
23%
Series B
Series C
21%
Series D
32% Series E +
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9 Venture Capital Activity Report | Q2 2010
Internet and Healthcare Deals Take Larger Share of VC
Perennial top 2 sectors share of dollars and deals increases 11% and 7% over Q1‟10.
VC traffic to internet companies surges with five quarter high on number of deals.
VC Deal Volume (#) by Sector, Q210
2%
1% 2%
3%1% Healthcare
2%
Internet
4% Mobile & Telecommunications
3% 23% Energy & Utilities
Software (non-internet/mobile)
6% Electronics
Computer Hardware & Services
7% Business Products & Services
Industrial
8% Automotive & Transportation
38% Consumer Products & Services
Financial
All Other
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VC Investment ($) by Sector, Q210
2% 1%
2% 1% 1% 1%
Healthcare
4%
4% Internet
Mobile & Telecommunications
28% Energy & Utilities
6% Software (non-internet/mobile)
Electronics
Computer Hardware & Services
17% Business Products & Services
Industrial
Automotive & Transportation
6% 27% Consumer Products & Services
Financial
All Other
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10 Venture Capital Activity Report | Q2 2010
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11 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
INTERNET
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12 Venture Capital Activity Report | Q2 2010
VC Bandwidth to Internet Companies Continues to Increase
Highest deals and dollars of the last five quarters. Deal count expands on back of
early stage investing strength. Large deals in gaming and ecommerce drive funding.
VC Investment and Deal Volume in Internet
227 234
221
194 $1,619
176 $1,489
$1,265
$1,069 $1,054
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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13 Venture Capital Activity Report | Q2 2010
Geographic Diversity Amongst Internet VC Deals Declines
Cali dominates, NY solidifies 2nd place and Mass grows slightly. Texas displayed
strength. Overall, Big 3 States took a larger share of VC internet deals & dollars.
VC Deal Volume (#) in Internet by State, Q210 Quarter Highlights
1%
California 234 deals | $1,619M
3%
4% 9% New York
Top Five Deals
Illinois
2% Zynga
Massachusetts
5% Groupon
Colorado Castlight Health
46% Tremor Media
3% Texas Gilt Groupe
Virginia
10% Washington
Top Cities
Georgia
San Francisco, CA
2% 15% DC 36 deals | $403M
New York, NY
All Other 33 deals | $227M
Chicago, IL
www.cbinsights.com 4 deals | $142M
San Mateo, CA
VC Investment ($) in Internet by State, Q210 11 deals | $95M
Los Angeles, CA
2% 1% 1% 1%4% 10 deals | $87M
California Palo Alto, CA
2% 2% 11 deals | $74M
New York
Mountain View, CA
Illinois 5 deals | $51M
Redwood City, CA
7% Massachusetts 4 deals | $43M
Colorado Austin, TX
7 deals | $28M
9% Texas Lowell, MA
Virginia 1 deal | $28M
56%
Washington
15% Georgia
DC
All Other
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14 Venture Capital Activity Report | Q2 2010
VCs Aggressively Funding Early Stage Internet Companies
Seed VC deals continue their ascent as a portion of internet deals. In aggregate, early
stage deals represented over 50% of deal volume for first time in last five quarters.
VC Deal Volume (#) in Internet by Series, Q210
1%
6% Seed
12%
Series A
18%
Series B
Series C
Series D
40%
23% Series E +
www.cbinsights.com
VC Investment ($) in Internet by Series, Q210
1% 1%
Seed
19% 20%
Series A
Series B
Series C
19% Series D
40% Series E +
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15 Venture Capital Activity Report | Q2 2010
VCs Funding Internet Companies Across Many Industries
Internet software & services and ecommerce deals seeing activity across many
categories. Ecommerce deals on track to eclipse levels seen in 1999.
VC Deal Volume (#) in Internet by Sub-Industry, Q210
1% Gaming
Discount
5% Social
38% Healthcare
12%
Advertising, Sales & Marketing
3%
Apparel & Accessories
Monitoring & Security
9% Information Providers & Portals
Video
Bus. Intelligence, Analytics & Performance Mgmt
2% Education & Training
6% eCommerce enablement
4% 5% Content Management
2% Data Storage
3% 2% 4% 4%
All Other
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VC Investment ($) in Internet by Sub-Industry, Q210
Gaming
Discount
19% 18%
Social
2% Healthcare
Advertising, Sales & Marketing
2% Apparel & Accessories
2% 10%
Monitoring & Security
3%
Information Providers & Portals
3% 8% Video
3% Bus. Intelligence, Analytics & Performance Mgmt
8% Education & Training
4% 6% 7% eCommerce enablement
Content Management
5% Data Storage
All Other
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16 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
HEALTHCARE
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17 Venture Capital Activity Report | Q2 2010
Healthcare Investment Bounces Back from Q1‟10 Swoon
Sizable late-stage deals drive investment bounce-back from Q1 in the face of sagging
deal volume; quarter-over-quarter funding still down 17% versus Q2 ‟09.
VC Investment and Deal Volume in Healthcare
192
167 173
136 138
$1,979 $1,910 $1,825
$1,639
$1,405
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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18 Venture Capital Activity Report | Q2 2010
California Takes a Bigger Slice of the Healthcare Pie
California‟s share of funding grows to 40% of total; Massachusetts maintains its
number two spot with Cambridge attracting the most of any single city.
VC Deal Volume (#) in Healthcare by State, Q210 Quarter Highlights
California 138deals | $1,639M
Massachusetts
17% Top Five Deals
Washington
Georgia Achaogen
3% 33% Tetraphase Pharmaceuticals
2% Pennsylvania Agile Therapeutics
2% New Jersey
TearScience
Incline Therapeutics
3% New York
3% 5% Illinois
Top Cities
North Carolina
6% Cambridge, MA
3% 23% Texas 11 deals | $169M
All Other San Diego, CA
11 deals | $132M
South San Francisco, CA
www.cbinsights.com
3 deals | $104M
VC Investment ($) in Healthcare by State, Q210 Seattle, WA
6 deals | $99M
6% Boston, MA
3%2% California 4 deals | $59M
Watertown, MA
3% Massachusetts
2 deals | $55M
3% Washington Chicago, IL
2 deals | $51M
4% Georgia Mountain View, CA
40% Pennsylvania 4 deals | $46M
4% New Jersey
Princeton, NJ
1 deal | $45M
5% New York Morrisville, NC
1 deal | $45M
7% Illinois
North Carolina
Texas
23%
All Other
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19 Venture Capital Activity Report | Q2 2010
Series C+ Healthcare Sees More than 50% of Total Funding
Early stage owns deal volume, but sizable investments in later stage deals, especially
those Series C and later, own overall share of dollars invested in 2nd quarter.
VC Deal Volume (#) in Healthcare by Series, Q210
6% 6% Seed
7%
Series A
Series B
21% 36% Series C
Series D
Series E +
24%
www.cbinsights.com
VC Investment ($) in Healthcare by Series, Q210
0%
9% Seed
7% 25% Series A
Series B
Series C
Series D
36% 23%
Series E +
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20 Venture Capital Activity Report | Q2 2010
Medical Device Investment Continues Dominance
Biotech loses as medical device investment continues to take share. Medical devices
have been consistently garnering more VC dollars going to healthcare since 2004.
VC Deal Volume (#) in Healthcare by Industry, Q210
1%
1%
2%1% Medical Devices & Equipment
3% 5% Pharmaceuticals / Drugs
4% Biotechnology
Drug Discovery
Drug Development
7% 45% Disease Diagnosis
Medical Facilities & Services
12% Medical Equipment & Supplies
Elective & Aesthetic Medicine
Medical Information
19% All Other
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VC Investment ($) in Healthcare by Industry, Q210
2% 0%
3% 1% 0% Medical Devices & Equipment
2%
4% Pharmaceuticals / Drugs
Biotechnology
Drug Discovery
7%
Drug Development
42%
Disease Diagnosis
11% Medical Facilities & Services
Medical Equipment & Supplies
Elective & Aesthetic Medicine
Medical Information
28% All Other
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21 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
GREEN & CLEAN TECH
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22 Venture Capital Activity Report | Q2 2010
Another Volatile Quarter for Green Tech
Funding declined 20% and deals dipped 35% vs. Q1‟10. On a YoY basis, cleantech
saw more green with funding up 44% while deal volume ticked up as well.
VC Investment and Deal Volume in Green
85
55 55 $1,322 55
47
$1,046
$913
$729
$565
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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23 Venture Capital Activity Report | Q2 2010
Mass and Texas Showing Growth in Green Tech
Mass and Texas boast significant growth versus Q1‟10. Mass saw 35% more green
funding while Texas sees almost 4 times as much funding.
VC Deal Volume (#) in Green by State, Q210 Quarter Highlights
California 55 deals | $1,046M
Massachusetts
13% Top Five Deals
5% Texas
Wisconsin BrightSource Energy
2% Amonix
2% Illinois Boston-Power
2% 47% SunRun
4% Oregon Virent Systems
Hawaii
3%
North Carolina
2% Top Cities
7% Vermont
Oakland, CA
13% Washington 1 deal | $150M
All Other Torrance, CA
1 deal | $129M
VC Investment ($) in Green by State, Q210 www.cbinsights.comSan Francisco, CA
3 deals | $66M
Sunnyvale, CA
2% 3 deals | $64M
2% 2% 1% 3% California Westborough, MA
2% Massachusetts 1 deal | $60M
4% Madison, WI
Texas 1 deal | $46M
Irvine, CA
Wisconsin 2 deals | $46M
4%
Illinois Fremont, CA
1 deal | $45M
8% Oregon League City, TX
Hawaii 1 deal | $40M
Cambridge, MA
62% North Carolina 3 deals | $34M
10%
Vermont
Washington
All Other
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24 Venture Capital Activity Report | Q2 2010
Green Funding Well Distributed Across Investment Stage
Venture funding in Q2‟10 was well balanced, with a modest shift to later stage deals.
Q2‟10 saw 63% of funding go to Series C or later versus, 48% in Q1‟09.
VC Deal Volume (#) in Green by Series, Q210
3% 3%
Seed
11%
Series A
31% Series B
23% Series C
Series D
Series E +
29%
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VC Investment ($) in Green by Series, Q210
0%
7% 10% Seed
Series A
28% Series B
27%
Series C
Series D
Series E +
28%
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25 Venture Capital Activity Report | Q2 2010
Renewables Attract the Most Funding
Green venture funding was concentrated in the Energy & Utilities sector. Solar and Bio-
Energy industries were strong with 300% and 150% growth, respectively, vs. Q1‟10.
VC Deal Volume (#) in Green by Sector, Q210
Energy & Utilities
13%
4%
2% Electronics
Automotive & Transportation
7%
Industrial
5%
Software (non-internet/mobile)
65%
4% Healthcare
All Other
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VC Investment ($) in Green by Sector, Q210
3%
2% 3% Energy & Utilities
3%
4% Electronics
4% Automotive & Transportation
Industrial
Software (non-internet/mobile)
81% Healthcare
All Other
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26 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
CALIFORNIA
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27 Venture Capital Activity Report | Q2 2010
What Smart Investors, Bankers and
Wealth Managers Use to Get Ahead…
With CB Insights you can access deep private company info that was once exclusively
available behind prohibitively expensive paywalls.
CB Insights is accessible for free by visiting http://www.cbinsights.com
73,000+ Private Company Profiles. Coverage Universe
Over 73,000 high value private
company profiles across industries and • Venture Capital – 1999 to present
sectors. Medical devices to • Angel Investment
mobile. Industrial to internet. • Private Equity
• Federal SBIR Grants – 3 years
• State Grant Programs
From Angel to Private Equity. • Incubators – Over 300
Angel investment to venture capital to • Middle Market Private Companies
private equity to government funding to
under the radar mid-market private Sector Coverage
companies.
• Green/clean tech
• Internet
Company & Investor Updates via Email. • Mobile & Telecom
• Software
Add companies and investors of • Energy & Utilities
interest to your CBI Watchlist and get • Computer Hardware & Services
notified of changes and updates • Healthcare
automatically. • Industrial
• Automotive & Transportation
Management & Board Information • Business Products & Services
• Consumer Products & Services
Add companies and investors of • Electronics
interest to your CBI Watchlist and get • Environmental Services &
notified of changes and updates Equipment
automatically. • Financial Services
• Food & Beverages
• Leisure
Analytics & Reporting • Media
• Metals & Mining
Downloadable reports and analytics
• Retail
which allow you to manipulate data
• Risk & Security
when and how you want to.
www.cbinsights.com
28 Venture Capital Activity Report | Q2 2010
The Big Get Bigger – Cali Up 35% vs. Q2„09
Deals dip in Golden State but on funding, Cali breaks the $3 billion mark for the first
time since Q3‟09; up nearly $800 million versus a year ago.
VC Investment and Deal Volume in California
305 300 297
264
218 $3,421
$2,929 $3,062
$2,685
$2,271
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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29 Venture Capital Activity Report | Q2 2010
Internet & Healthcare More than Half of Cali VC Funding
Healthcare investment in California balloons nearly 50% since Q1‟10; Internet follows
suit growing nearly 40% over the same period; Energy investment also remains strong.
VC Deal Volume (#) in California by Sector, Q210 Quarter Highlights
3% 2%
1%3% 1% 0% Healthcare 264 deals | $3,062M
Internet
5% Top Sector
17% Mobile & Telecommunications
# of Deals – Internet
Energy & Utilities
$ of Funding - Healthcare
6% Software (non-internet/mobile)
Electronics Top Five Deals
6% Computer Hardware & Services BrightSource Energy
Zynga
Business Products & Services
Amonix
7% Industrial Palantir Technology
Automotive & Transportation Stion
8% 41%
Consumer Products & Services
Food & Beverages Top Cities
All Other San Francisco
55 deals | $568M
www.cbinsights.com San Diego
20 deals | $188M
Palo Alto
VC Investment ($) in California by Sector, Q210 15 deals | $188M
Oakland
2% 1% 0%2%
1% 1%
3 deals | $180M
Healthcare Mountain View
5% 14 deals | $143M
Internet
Sunnyvale
21% Mobile & Telecommunications 10 deals | $133M
6% Energy & Utilities San Mateo
Software (non-internet/mobile) 15 deals | $129M
6% Torrance
Electronics 1 deal | $129M
Computer Hardware & Services San Jose
Business Products & Services 10 deals | $125M
Los Angeles
19% Industrial 15 deals | $119M
30% Automotive & Transportation
Consumer Products & Services
6% Food & Beverages
All Other
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30 Venture Capital Activity Report | Q2 2010
Early Stage Investing Returns to California in a Big Way
Venture capital seed investing makes its presence felt; dollars invested in early stage
companies jumps 35% versus Q1‟10.
VC Deal Volume (#) in California by Series, Q210
4% 8% Seed
14% Series A
Series B
28%
Series C
23% Series D
Series E +
23%
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VC Investment ($) in California by Series, Q210
1%
4% Seed
13%
Series A
29%
Series B
21% Series C
Series D
Series E +
32%
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31 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
MASSACHUSETTS
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32 Venture Capital Activity Report | Q2 2010
Massachusetts‟ Funding Declines to More Typical Levels
Venture funding to Massachusetts‟ companies sinks 23% since Q1‟10, but does
remain up 45% since last year. Deal volume remains strong.
VC Investment and Deal Volume in Massachusetts
88 87 84
73
$898
57
$653 $689
$596
$473
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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33 Venture Capital Activity Report | Q2 2010
Healthcare Remains Cornerstone; Internet and Mobile Also Up
Healthcare continues to dominate the Massachusetts VC scene on the back of early
stage deals. Internet and Mobile steal share from Energy and Electronics.
VC Deal Volume (#) in Massachusetts by Sector, Q210 Quarter Highlights
1% 2% 1% 84 deals | $689M
4% Healthcare
Top Sector
Internet # of Deals – Healthcare
10% $ of Funding - Healthcare
Mobile & Telecommunications
39%
5% Energy & Utilities Top Five Deals
Boston-Power
Software (non-internet/mobile) Tetraphase Pharmaceuticals
10% Catabasis Pharmaceuticals
Electronics Joule Biotechnologies
Industrial Foldrx Pharmaceuticals
Automotive & Transportation Top Cities
28%
Business Products & Services Cambridge
20 deals | $224M
www.cbinsights.com Boston
VC Investment ($) in Massachusetts by Sector, Q210 12 deals | $89M
Waltham
1% 0% 0% 9 deals | $65M
2%
Healthcare Westborough
1 deal | $60M
5% Watertown
Internet
2 deals | $55M
14% Mobile & Telecommunications Lexington
4 deals | $34M
Energy & Utilities Lowell
1 deal | $28M
6% Software (non-internet/mobile) Beverly
2 deals | $25M
56% Electronics Woburn
6 deals | $23M
16% Industrial Medford
1 deal | $18M
Automotive & Transportation
Business Products & Services
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34 Venture Capital Activity Report | Q2 2010
Seed and Series A Lead the Way in Massachusetts
Massachusetts follows early stage investment trend – seed deals comprise a
significant portion of volume and early stage nabs nearly 25% of funding.
VC Deal Volume (#) in Massachusetts by Series, Q210
2%
7% Seed
11%
Series A
Series B
16%
36% Series C
Series D
Series E +
28%
www.cbinsights.com
VC Investment ($) in Massachusetts by Series, Q210
1%
10% Seed
24% Series A
11%
Series B
Series C
Series D
30% 24%
Series E +
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35 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
NEW YORK
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36 Venture Capital Activity Report | Q2 2010
New York VC Investment Continues Its Upward Trend
NY saw its fourth quarter of increased venture funding. Funding was up 11% vs.
Q1‟10 while deals slipped. On a YoY basis, deals up modestly but dollars fell.
VC Investment and Deal Volume in New York
55
48
44
39 41
$386
$355
$319
$286
$227
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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37 Venture Capital Activity Report | Q2 2010
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connect with us via any of the following.
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38 Venture Capital Activity Report | Q2 2010
New York‟s Web State of Mind
NY‟s lack of diversity from an industry perspective was quite stark with a record 73% of
deals being in internet companies. Internet deals grew by 25% compared to Q1‟10.
VC Deal Volume (#) in New York by Sector, Q210 Quarter Highlights
2%
48 deals | $355M
Healthcare
4% 8%
Top Sector
13% # of Deals – Internet
Internet
$ of Funding - Internet
Top Five Deals
Mobile & Telecommunications Tremor Media
Gilt Groupe
Exosome Diagnostics
Business Products & Services Foursquare
TRA
73%
Energy & Utilities Top Cities
New York
45 deals | $322M
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VC Investment ($) in New York by Sector, Q210 Ithaca
1 deal | $13M
Brooklyn
2% 1 deal | $10M
Bronx
4% Healthcare 1 deal | $10M
15%
9%
Internet
Mobile & Telecommunications
Business Products & Services
70%
Energy & Utilities
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39 Venture Capital Activity Report | Q2 2010
Early Stage Deals Strong in New York
Early stage dominated taking 62% of deals – a 35% increase over Q1‟10. Early stage
was 31% of funding, a 135% increase in funding vs. Q1‟10.
VC Deal Volume (#) in New York by Series, Q210
2%
5%
Seed
16%
11% Series A
Series B
Series C
20%
Series D
46% Series E +
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VC Investment ($) in New York by Series, Q210
1%
4% Seed
17% Series A
30%
Series B
Series C
25%
Series D
Series E +
23%
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40 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
WASHINGTON
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41 Venture Capital Activity Report | Q2 2010
Washington‟s VC Tally Slowly Creeping Back
Dollars up 53% vs. prior quarter but still down 23% relative to year ago period.
Number of deals remains range-bound over last few quarters.
VC Investment and Deal Volume in Washington
45
$275 29
26 25
21
$211
$165
$144 $138
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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42 Venture Capital Activity Report | Q2 2010
Healthcare Tops on Funding and Deal Volume
Healthcare sector took 50% of funding setting a new high for healthcare sector‟s share in
a quarter. Healthcare and internet saw majority of deals taking 60% share.
VC Deal Volume (#) in Washington by Sector, Q210 Quarter Highlights
25 deals | $211M
4% 4% Healthcare
4%
Internet Top Sector
# of Deals – Healthcare
8% 32% $ of Funding - Healthcare
Mobile & Telecommunications
Energy & Utilities Top Five Deals
Calistoga Pharmaceuticals
12% Computer Hardware & Services TerraPower
Spring Wireless
Environmental Services & Equipment Opscode
GroundTruth
8% Industrial
28% Top Cities
Business Products & Services
Seattle
20 deals | $160M
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VC Investment ($) in Washington by Sector, Q210 Bellevue
2 deals | $38M
Arlington
3% 2% 1% 1 deal | $7M
Healthcare Kent
1 deal | $6M
7% Internet Kirkland
1 deal | $1M
Mobile & Telecommunications
Energy & Utilities
18%
50% Computer Hardware & Services
Environmental Services & Equipment
9% Industrial
10% Business Products & Services
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43 Venture Capital Activity Report | Q2 2010
Series A and B Rounds Driving Growth
Washington‟s funding growth came from Series A and B rounds which posted 300+%
and 200+% growth vs. Q1‟10, respectively. Early stage deals also healthy.
VC Deal Volume (#) in Washington by Series, Q210
0%
9% 4% Seed
9% Series A
Series B
35%
Series C
Series D
43% Series E +
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VC Investment ($) in Washington by Series, Q210
0% 1%
7% Seed
30%
Series A
22%
Series B
Series C
Series D
Series E +
40%
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44 Venture Capital Activity Report | Q2 2010
Q2 2010 Venture Capital
TEXAS
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45 Venture Capital Activity Report | Q2 2010
Texas Deals and Dollars Explode Versus Last Year
Texas showed solid growth versus last year as the number of deals nearly doubled
and funding grew by 58%. Vs. Q1‟10, funding and dollars both down double digits.
VC Investment and Deal Volume in Texas
39 38
33
30
$264
$232 $238
17 $212
$134
Q2'09 Q3'09 Q4'09 Q1'10 Q2'10
Funding ($M) # of Deals
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46 Venture Capital Activity Report | Q2 2010
Texas Venture Investments Seeing Green
Energy & utilities investments took nearly 50% of total funding on the back of
investments in renewable technologies. Internet took one third of all deals.
VC Deal Volume (#) in Texas by Sector, Q210 Quarter Highlights
3%
33 deals | $212M
Healthcare
3% 3% 6% 12% Internet Top Sector
# of Deals – Internet
Mobile & Telecommunications $ of Funding - Internet
9% Energy & Utilities
Top Five Deals
Computer Hardware & Services Kior
HelioVolt
12% 34% Risk & Security Xtreme Power
Mavenir Systems
Software (non-internet/mobile) Oxane Materials
Food & Beverages
18% Top Cities
All Other
Austin
16 deals | $87M
www.cbinsights.com League City
VC Investment ($) in Texas by Sector, Q210
1 deal | $40M
2% 1%2% Richardson
0%
2 deals | $24M
Healthcare Kyle
4% 1 deal | $18M
14% Internet San Antonio
Mobile & Telecommunications 2 deals | $17M
Houston
Energy & Utilities 1 deal | $11M
16% Dallas
Computer Hardware & Services 3 deals | $6M
Spring
Risk & Security
1 deal | $4M
47% Software (non-internet/mobile) Bellaire
1 deal | $3M
14% Food & Beverages West Lake Hills
1 deal | $2M
All Other
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47 Venture Capital Activity Report | Q2 2010
Series C + Dominates Funding. Early Stage Deals Healthy.
Venture investments in the Series C or later took 72% of the total funding dollars in
Q2‟10. On a deals basis, early stage represented 44% of deals.
VC Deal Volume (#) in Texas by Series, Q210
6% 5% Seed
Series A
22%
Series B
39% Series C
Series D
17% Series E +
11%
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VC Investment ($) in Texas by Series, Q210
1%
14% Seed
24% Series A
Series B
3% Series C
Series D
40%
18%
Series E +
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48 Venture Capital Activity Report | Q2 2010
Venture Capital - Median Deal Values for Q2 2010
Sector Seed Series A Series B Series C Series D Series E +
Electronics $4.00 $6.60 $15.00 $16.70
Financial $5.20 $24.50 $21.35 $2.30
Healthcare $0.80 $8.00 $10.00 $20.30 $12.00 $16.00
Industrial $5.50 $3.44 $4.00 $19.80 $1.25
Internet $1.00 $3.10 $5.20 $10.00 $10.00 $10.06
Mobile & Telecommunications $1.00 $3.50 $7.00 $11.20 $12.75 $6.05
Energy & Utilities $1.00 $3.00 $13.70 $32.63 $57.50 $35.70
Business Products & Services $6.00 $7.00 $7.00 $14.00 $7.50
Automotive & Transportation $35.00 $2.00
Software (non-internet/mobile) $2.50 $2.70 $17.50 $8.00 $14.00
Computer Hardware & Services $1.20 $15.00 $10.00 $14.50 $5.00 $10.00
Consumer Products & Services $1.00 $2.53 $3.00 $4.50
Risk & Security $11.00
Food & Beverages $2.00 $0.25
Retail (non-internet/mobile) $19.80
Environmental Services & Equipment $6.90
Median Deal Size (all sectors) $1.00 $3.50 $6.00 $12.40 $11.60 $10.00
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49 Venture Capital Activity Report | Q2 2010
Definitions – Ensuring Data Integrity
What‟s Included in our Quarterly Venture Capital Numbers? What is not?
Given the importance of venture capital in spurring innovation and entrepreneurship, measuring venture capital activity
accurately is important. We encourage you to review the methodology and definitions employed by us to better
understand the numbers presented in this report. If you have any questions about our definitions or methodological
principles, we encourage you to reach out to us directly.
What is included? What is excluded?
• Equity financings into emerging companies. • Angel investment. These are not included in
Funding must come from venture capital firms including numbers unless an investment round included Angels
corporate venture groups. investing alongside a venture capital firm or corporate
• Fundings of only private companies. Public venture group.
companies of any kind on any exchange (even Pink • No contingent funding. If a company receives a
Sheets) are not included in our numbers even if they commitment for $20M subject to hitting certain
received investment by a venture firm(s) milestones but first gets $8M, only the $8M is included
• Companies must be headquartered in the USA. Our in our data.
geographic data is based on the city and state where the • No business development/R&D arrangements
company receiving investment is headquartered. If a whether transferable into equity now, later or
company has a satellite office/presence in multiple cities never. If a company signs a $300M R&D partnership
or was founded in a particular city but has moved its HQ, with a larger corporation, this is not equity financing
our results reflect only this address. nor is it from venture capital firms. As a result, it is not
• Only include the investment made in the quarter for included.
tranched investments. If a company does a second • Buyouts, Consolidations and Recapitalizations.
closing of its Series B round for $5M and previously had All three of these of transaction types are commonly
closed $2M in a prior quarter, only the $5M is reflected employed by private equity firms and are tracked by
in our results. CB Insights. However, they are excluded for the
• Round #s reflect what has closed – not what is purposes of this report. Private equity investments into
intended. If a company or regulatory filing indicates the companies which may have received venture capital
closing of $5M out of a desired raise of $15M, our investment prior are also not included.
numbers reflect only the amount which has closed. • Private placements. These investments also known
• Only verifiable fundings are included. Fundings are as PIPEs (Private Investment in Public Equities) even
verified via (1) various federal & state regulatory filings if made by a venture capital firm(s) are not included.
(2) direct confirmation with firm or investor or (3) press • Debt/loans of any kind. Venture debt or any kind of
release. debt/loan issued to emerging, startup companies even
• Funding close date matters. Fundings are provided if included as an additional part of an equity financing
based on funding close date and not on announcement is not included. If a company receives $3M with $2M
date. from venture investors and $1M in debt, only the $2M
is included in these statistics.
• Government funding. Grants, loans, equity
financings by the federal government, state agencies
or public-private partnerships to emerging, startup
companies are not included. Strictly venture or
corporate venture outfits.
• Incubator investments. Investments of money as
equity or debt and/or services by incubators are not
included.
• Strategic corporate investments. Corporations
making strategic investments in companies but not as
part of a specific organized venture group are not
included.
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50 Venture Capital Activity Report | Q2 2010
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51 Venture Capital Activity Report | Q2 2010
Get Started for Free with CB Insights
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