Annual Venture Investments Rise
Venture capitalists invested $29.4 billion in 3,995 deals in 2013, an increase of 7% in dollars and a 4% increase in deals over the prior year, The MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters. In Q4 2013, $8.4 billion went into 1,077 deals.
Internet-specific companies captured $7.1 billion in 2013, marking the highest level of Internet investment since 2001. Additionally, annual investments into the software industry also reached the highest level since 2000 with $11 billion flowing into 1,523 deals in 2013. Dollars going into software companies accounted for 37% of total venture capital invested in 2013, the highest percentage since the inception of the MoneyTree Report in 1995.
“Advances in technology continue to revolutionize how companies engage their customers on nearly every level and has changed the landscape of virtually every industry,” said Mark McCaffrey, global software leader and technology partner at PwC. “Consumers can see how innovation is changing their lives in the internet and software spaces and are eager to embrace technology at a faster and faster rate. Combined with the high ROI being driven by the success of recent IPOs and an active acquisition market, it is no surprise that more venture capital dollars are flowing into early-stage software and internet companies. In fact, investments in software companies accounted for more than one-third of all VC investing in 2013.”
“The fourth quarter and 2013 year end numbers show that there is a lot of energy around internet-specific companies and stronger interest in biotechnology. We are hearing that this optimism is being fueled by a strong exit market, an improved economy, and as always, innovative entrepreneurs. VC investment is also being bolstered by the continued involvement of corporations in VC deals,” said Bobby Franklin, president and CEO of NVCA. “There has been some public discussion about recent high valuation levels in private technology companies. Private company valuations follow the public markets and market-leading venture-backed companies are seeing strong interest from investors across the board. We are not hearing concerns of a return to bubble values of the late 1990s.”