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PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016

PwC / CB Insights

PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016

MoneyTree

Report

Q4

and Full-year 2016

PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
PwC / CB Insights MoneyTree ™ Report Q4 and Full-year 2016
01 US Trends 1 Deals continue to fall, hitting five-year quarterly low 2 Broad-based decline

01

US Trends

1 Deals continue to fall, hitting five-year quarterly low

2 Broad-based decline in deals across major Tech hubs in CA and NY; DC/Metroplex emerged as one of the brighter spots

3 Internet holds top sector spot, Mobile & Telecom bumps Healthcare for second place

4 Artificial Intelligence companies beat overall slowdown

5 Mega-round activity and unicorn birth rate remain low

02 US Sectors • Internet was the top US sector in four of the past
02
US Sectors
• Internet was the top US
sector in four of the past
five quarters
• Q4’16 was led by
Internet, Healthcare,
Mobile, Software, and
Hardware
• Within Internet, hot
spaces were Analytics;
Ad, Sales & Marketing;
and Marketplaces
03 04 US Movers US Places and Shakers • Top five regions in the •
03
04
US Movers
US Places
and Shakers
• Top five regions in the
• The top five deals in
US for venture capital:
the US in the quarter
Silicon Valley, NY, DC,
went to companies
New England, and
based in New York,
LA/Orange County.
Boston, San
Francisco, and
• The top 10 US states
Arlington, VA.
for venture were led by
California, New York,
• The three most active
and Virginia.
venture capitalists in
the quarter were NEA,
500 Startups, and True
Ventures.

05

Global

• Global deals dropped 16% on a full-year basis versus 2015.

• North America saw funding into the region drop below $13B for the first time since Q1’14, but Canada was a bright spot

• Funding jumped 22% in Europe and deals rose

• Asia saw deals and dollars plunge

01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and
01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and

01

01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year

US Trends:

Q4 & Full-year 2016

01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
01 US Trends: Q4 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
Overall financing trends
Overall financing trends

Financing to US VC-backed companies continues to drop off:

• Investor caution prevailed as Q4’16 saw a 14% slowdown in deals and 17% decline in total funding from the prior quarter. 2016 saw a total of $58.6B invested across 4,520 deals, down 20% and 16%, respectively from 2015.

• Quarterly deals and dollars both reached 8-quarter lows, with total deals dropping below 1,000 for the first time since Q4’11.

• Quarterly deal count slipped in every quarter in 2016, while total funding has fallen for 2 consecutive quarters (following Q2’16, which saw $1B+ rounds going to Uber and Snap).

Q2’16, which saw $1B+ rounds going to Uber and Snap). 1,600 1,433 1,407 1,362 1,247 1,400
1,600 1,433 1,407 1,362 1,247 1,400 1,204 1,150 1,141 1,200 982 1,000 800 600 400
1,600
1,433
1,407
1,362
1,247
1,400
1,204
1,150
1,141
1,200
982
1,000
800
600
400
200
$18.3
$20.8
$19.8
$14.4
$15.6
$17.3
$14.0
$11.7
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($B)
# of Deals
# Deals
Regional trends
Regional trends

Broad-based decline across major Tech hubs:

• Investment into Silicon Valley-based companies slowed sharply, with 37% less dollars invested across 22% fewer deals than in Q3’16.

New England — including Massachusetts — trended similarly, with deals down 6% while total funding fell 41%.

• Deal activity in the New York Metro region fell 17%, although total dollars rose 12%, as companies, including WeWork and Buzzfeed, secured $200M+ financings in the quarter.

Percentage change in dollars invested Q4/Q3 2016
Percentage change in dollars invested Q4/Q3 2016
37% 41% Silicon Valley New England
37%
41%
Silicon Valley
New England
Regional trends (cont.)
Regional trends (cont.)

Some regions emerged as brighter spots:

Midwest-based companies saw total funding tick up 1%, while deals also rose 4% for the quarter, a noticeable contrast to the cooling of investment into other regions.

• The DC/Metroplex area saw funding spike 132%, fueled by a $1.2B mega-round to satellite broadband provider OneWeb.

• The Northwest also saw quarterly deal count rising 15% from Q3’16. Financing held relatively steady, falling just 3% from the quarter prior.

Percentage change in dollars invested Q4/Q3 2016

1% 132% Midwest DC/Metroplex
1%
132%
Midwest
DC/Metroplex
Sector trends
Sector trends

Internet holds top spot, Mobile & Telecom bumps Healthcare for second:

• Despite total funding dollars to Internet companies diving 26% from Q3’16, the sector retained the top spot with $4.6B of funding.

Internet accounted for 39% of US dollars for the quarter, far more than any other sector (yet down from 46% of total dollars in Q3’16).

• Meanwhile, funding to Mobile & Telecom companies rose 19% from Q3’16, bumping out Healthcare (which fell 43%) as the second-place sector by deal value.

(which fell 43% ) as the second-place sector by deal value. 26% Internet Percentage change in
(which fell 43% ) as the second-place sector by deal value. 26% Internet Percentage change in

26%

Internet

Percentage change in dollars invested Q4/Q3 2016
Percentage change in dollars invested Q4/Q3 2016
Internet Percentage change in dollars invested Q4/Q3 2016 19% Mobile & Telecom 43% Healthcare PwC |

19%

Mobile & Telecom

in dollars invested Q4/Q3 2016 19% Mobile & Telecom 43% Healthcare PwC | CB Insights MoneyTree™
in dollars invested Q4/Q3 2016 19% Mobile & Telecom 43% Healthcare PwC | CB Insights MoneyTree™

43%

Healthcare

PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016

7

Thematic areas of interest
Thematic areas of interest
Thematic areas of interest Artificial Intelligence beats broad slowdown • Artificial intelligence: Investor interest

Artificial Intelligence beats broad slowdown

Artificial intelligence: Investor interest in AI outweighed the overall downturn, as AI companies in the US secured $705M in financing across 71 deals (rising 16% and 22%, respectively, on a quarterly basis).

Cybersecurity: After rising in Q3’16, US Cybersecurity funding plunged 51% to $370M. Deals also dropped to 32, down from 40 in the previous quarter.

Auto Tech: This space saw a relatively quiet quarter with $90M in total funding in the US, compared to $290M in Q2’16.

Thematic areas of interest
Thematic areas of interest

Artificial Intelligence is becoming a major disruptor across a number of sectors. This is evidenced by the record level of investments in AI in 2016. This is likely to continue in 2017, as AI moves from the Technology sector to other traditional enterprise sectors like automotive, financial services and healthcare.

— Anand Rao, Partner, PwC

US mega-round and unicorn trends
US mega-round and unicorn trends

$100M+ mega-rounds drop to 5-quarter low

• Q4’16 featured 11 financings of $100M or more to US VC-backed companies, down from 19 in Q1’16 and 15 in Q3’16.

OneWeb’s $1.2B financing was the sole round larger than $500M, while previous quarters saw multiple such deals (e.g., Uber, Snap, Airbnb, etc.).

• New York City-based WeWork’s $260M Series F tranche ranked second, while OpenDoor Labs’ $210M Series D was the largest round to a California company in the quarter.

Unicorn birth rate remains low

4 new unicorns, or private companies valued at $1B+, were minted in the US, equal to the figure from Q3’16.

• Unicorn creation is a fraction of what was seen in 2015, which peaked at 16 in Q3’15. That said, US still led the world with 101 unicorns in total through 2016.

• California saw a pair of new unicorns in construction tech company Procore Technologies and real estate tech startup OpenDoor Labs.

02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016

02

US Sector Activity:

02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11

Q4’16

02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11
02 US Sector Activity: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 11
Top five US sectors in the past five quarters
Top five US sectors in the past five quarters

Trends:

• Total funding to Mobile & Telecom companies rose 19% from Q3’16, bumping out Healthcare as the second-place sector by deal value.

• Meanwhile, both quarterly deals and funding dollars in Internet and Healthcare fell significantly for the quarter.

Mobile & Software (non- Computer Hardware Telecomm. Q4 internet /mobile Healthcare & Services Internet
Mobile &
Software (non-
Computer Hardware
Telecomm.
Q4
internet
/mobile
Healthcare
&
Services
Internet
2016
$0.7B
$0.4B
$4.6B
$2.5B
$1.9B
462 Deals
155 Deals
119 Deals
76 Deals
29 Deals
Healthcare
Mobile &
Software (non-
Q3
Computer Hardware
Telecomm.
internet /mobile
& Services
2016 Internet
$6.2B
$3.3B
$2.1B
$0.6B
$0.4B
558 Deals
151 Deals
142 Deals
67 Deals
33 Deals
$0.4B 558 Deals 151 Deals 142 Deals 67 Deals 33 Deals Q2 Software (non- internet /mobile
$0.4B 558 Deals 151 Deals 142 Deals 67 Deals 33 Deals Q2 Software (non- internet /mobile

Q2

Software (non-

internet /mobile

Healthcare

2016

Mobile &

Internet

 
2016 Mobile & Internet   Electronics
2016 Mobile & Internet   Electronics

Electronics

Electronics

Telecomm.

$6.2B

$5.5B

$0.8B

$0.8B

$0.4B

   

$2.7B

    $2.7B

Q1

2016

174 Deals Internet $5.7B
174 Deals
Internet
$5.7B

558 Deals

Healthcare $3.2B
Healthcare
$3.2B

135 Deals

Mobile &

Telecomm. $2.7B
Telecomm.
$2.7B

60 Deals

Software (non-

internet /mobile $1.5B
internet /mobile
$1.5B

27 Deals

Business Products

& Services

$0.6B
$0.6B

568 Deals

27 Deals Business Products & Services $0.6B 568 Deals 172 Deals Healthcare 195 Deals Mobile &

172 Deals

Healthcare

195 Deals

Mobile &

Telecomm.

50 Deals

Software (non-

internet /mobile

12 Deals

Q4

Computer Hardware

& Services

/mobile 12 Deals Q4 Computer Hardware & Services 2015 Internet $1.5B $1.0B $0.7B $6.6B

2015

Internet

2015 Internet $1.5B

$1.5B

$1.5B
2015 Internet $1.5B
2015 Internet $1.5B

$1.0B

$0.7B

$6.6B

$2.7B

$6.6B $2.7B
$6.6B $2.7B
   

582 Deals

165 Deals

166 Deals

71 Deals

28 Deals

Top 10 Sectors in the US based on dollars invested in the last 20 years
Top 10 Sectors in the US based on
dollars invested in the last 20 years
in the US based on dollars invested in the last 20 years Internet $187.1B Healthcare $150.4B

Internet

$187.1B

Healthcare $150.4B Mobile & Telecomm. Software $115.2B (non-internet/ mobile) $95.7B Computer Hardware &
Healthcare
$150.4B
Mobile &
Telecomm.
Software
$115.2B
(non-internet/
mobile)
$95.7B
Computer
Hardware &
Services
$55.0B
Business
Media
Electronics
Energy
Products &
(Traditional)
$33.7B
& Utilities
Services
Industrial
$28.5B
$25.0B
$21.5B
$21.0B
Q4’16 Deep Dive: Internet sector
Q4’16 Deep Dive:
Internet sector

Although overall funding is down and valuations seemed to have leveled off, anticipation of the IPO market opening still remains attractive for investors when looking at models that have the potential to be disruptive to their markets."

— Mark McCaffrey, Partner, PwC

to their markets." — Mark McCaffrey , Partner, PwC 26% Drop in funding compared to Q3’16
to their markets." — Mark McCaffrey , Partner, PwC 26% Drop in funding compared to Q3’16

26%

Drop in funding compared to Q3’16

, Partner, PwC 26% Drop in funding compared to Q3’16 ” Largest Q4’16 Internet deals: $210M

Largest Q4’16 Internet deals:

$210M

$200M

$150M

OpenDoor Labs Real estate

Buzzfeed News & Discussion

Stripe

Payments

Q4’16 Deep Dive:
Q4’16 Deep Dive:

Internet sector (cont.)

Q4’16 Deep Dive: Internet sector (cont.) Internet retains top spot among sectors amid broad slowdown in
Q4’16 Deep Dive: Internet sector (cont.) Internet retains top spot among sectors amid broad slowdown in

Internet retains top spot among sectors amid broad slowdown in investment

• Total funding to US Internet companies fell 26% to $4.6B on a quarterly basis, with deal activity also tumbling 17% to 462 for the quarter.

• The sector accounted for 39% of US deal value for the quarter, far more than any other sector (yet down from 46% in Q3’16).

• Internet companies, including OpenDoor Labs, Buzzfeed, and Stripe, secured 8 of the 20 largest deals in the quarter.

Q4’16 Deep Dive: Mobile & Telecom sector
Q4’16 Deep Dive:
Mobile & Telecom sector

Funding for the Mobile & Telecom sector bucks the downward trend in overall VC funding and was driven by the only billion dollar deal for the quarter (OneWeb). The strong performance of the sector was also driven by large deals in video and advertising network sub-industries.

Bart Spiegel, US Entertainment, Media and Communications Deals Partner

, US Entertainment, Media and Communications Deals Partner 19% Rise in funding compared to Q3’16 ”
, US Entertainment, Media and Communications Deals Partner 19% Rise in funding compared to Q3’16 ”
, US Entertainment, Media and Communications Deals Partner 19% Rise in funding compared to Q3’16 ”
, US Entertainment, Media and Communications Deals Partner 19% Rise in funding compared to Q3’16 ”

19%

Rise in funding compared to Q3’16

Deals Partner 19% Rise in funding compared to Q3’16 ” Largest Q4’16 Mobile & Telecom deals:

Largest Q4’16 Mobile & Telecom deals:

$1.2B

$141M

$92M

OneWeb

Cable & satellite

Postmates

Supply chain & logistics

Crossover Health

Healthcare

Q4’16 Deep Dive: Healthcare
Q4’16 Deep Dive:
Healthcare

Healthcare, which was the second largest sector by dollar amount in the third quarter, fell to third place in Q4. Despite the drop, the sector still had two of the 10 largest deals for the quarter.

— Thaddeus Kresho, Partner, Health Services Deals Leader

— Thaddeus Kresho , Partner, Health Services Deals Leader 43% Drop in funding compared to Q3’16
— Thaddeus Kresho , Partner, Health Services Deals Leader 43% Drop in funding compared to Q3’16
— Thaddeus Kresho , Partner, Health Services Deals Leader 43% Drop in funding compared to Q3’16
— Thaddeus Kresho , Partner, Health Services Deals Leader 43% Drop in funding compared to Q3’16

43%

Drop in funding compared to Q3’16

Deals Leader 43% Drop in funding compared to Q3’16 ” Largest Q4’16 Healthcare deals: $206M $116M

Largest Q4’16 Healthcare deals:

$206M

$116M

$80M

Intarcia Therapeutics

Pharmaceuticals / Drugs

Unity Biotechnology

Biotechnology

Biohaven

Biotechnology

Q4’16 number and value of deals by sector

Q4’16 number and value of deals by sector 462 Deals Avg. Deal Size: $9.9M 155 Deals
Q4’16 number and value of deals by sector 462 Deals Avg. Deal Size: $9.9M 155 Deals

462 Deals

Avg. Deal

Size: $9.9M

155 Deals

Avg. Deal Size: $16.0M

119 Deals

Avg. Deal Size: $15.8M

Internet $4.6B
Internet
$4.6B
$16.0M 119 Deals Avg. Deal Size: $15.8M Internet $4.6B Mobile & Telecomm $2.5B Healthcare $1.9B 76

Mobile & Telecomm

$2.5B

Size: $15.8M Internet $4.6B Mobile & Telecomm $2.5B Healthcare $1.9B 76 Deals Avg. Deal Size: $9.0M

Healthcare

$1.9B

76 Deals

Avg. Deal

Size: $9.0M

$0.7B
$0.7B

Software Software (Non-Internet / Mobile)

26 Deals

Avg. Deal Size: $14.1M

(Non-Internet / Mobile) 26 Deals Avg. Deal Size: $14.1M $0.4B Computer Hardware & Services PwC |

$0.4B

Computer Hardware & Services

03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19

03

03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19

US Places:

Q4’16

03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19
03 US Places: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016 19

US: Top five regions by deal value

US: Top five regions by deal value 310 Deals Avg. Deal Size: $12.6M 129 Deals Avg.
US: Top five regions by deal value 310 Deals Avg. Deal Size: $12.6M 129 Deals Avg.

310 Deals

Avg. Deal Size: $12.6M

129 Deals

Avg. Deal Size: $15.2M

38 Deals

Avg. Deal Size: $37.9M

104 Deals

Avg. Deal Size: $12.4M

54 Deals

Avg. Deal Size: $16.3M

Silicon Valley
Silicon Valley
$12.4M 54 Deals Avg. Deal Size: $16.3M Silicon Valley NY Metro DC/Metroplex $1.4B New England $1.3B

NY Metro

54 Deals Avg. Deal Size: $16.3M Silicon Valley NY Metro DC/Metroplex $1.4B New England $1.3B LA/O.C.

DC/Metroplex

$1.4B

New England
New England

$1.3B

Silicon Valley NY Metro DC/Metroplex $1.4B New England $1.3B LA/O.C. $0.9B $2.0B $3.9B PwC | CB

LA/O.C.

$0.9B

$2.0B

$3.9B

US: All US regions
US: All US regions
US: All US regions Upstate NY New England $20M $1,285M NY Metro Midwest $1,961M $434M Philadelphia

Upstate

NY New England $20M $1,285M NY Metro Midwest $1,961M $434M Philadelphia Metro $68M Southeast $372M
NY
New England
$20M
$1,285M
NY Metro
Midwest
$1,961M
$434M
Philadelphia
Metro
$68M
Southeast
$372M
$1,441M

DC/Metroplex

Metro $68M Southeast $372M $1,441M DC/Metroplex Northwest North $360M Central $140M Southwest CO
Northwest North $360M Central $140M Southwest CO $226M $118M Texas $181M San Diego $179M South
Northwest
North
$360M
Central
$140M
Southwest
CO
$226M
$118M
Texas
$181M
San Diego
$179M
South Central
$9M

Sacramento/N. Cal

$80M

Silicon Valley

$3,921M

LA/Orange County

$879M

$ 8 0 M Silicon Valley $3,921M LA/Orange County $879M AK/HI/PR N/A PwC | CB Insights

AK/HI/PR

N/A

8-quarter financing trend:
8-quarter financing trend:

Silicon Valley

Top Tech hub sees significant drop off

• Compared to Q3’16, 37% less dollars were invested in Silicon Valley companies across 22% fewer deals. Full-year funding stood at $24.9B, down 28% from 2015, while cumulative deal count was down 21% at 1,484.

• The absence of $500M+ or $1B+ rounds contributed to the dramatic funding dip; such outsized deals to companies like Uber and Airbnb had lifted investment totals in Q2’16 and Q3’16.

Airbnb had li fted investment totals in Q2’16 and Q3’16. 600 520 492 473 500 383

600

520 492 473 500 383 395 396 382 400 310 300 200 100 $8.8 $10.4
520
492
473
500
383
395
396
382
400
310
300
200
100
$8.8
$10.4
$9.5
$5.7
$6.0
$8.8
$6.2
$3.9
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($B)
# of Deals
# Deals
8-quarter financing trend: NY Metro
8-quarter financing trend:
NY Metro

Deal and dollar activity diverges in NY Metro

• Investors continued to pull back from NY deals for the third consecutive quarter, while funding rose for the second straight quarter. Full-year 2016 figures for the region were down in both deal (12%) and dollar (9%) terms.

• Several mega-rounds of $100M or more drove the Q4’16 funding bump, raised by established startups such as WeWork ($260M Series F tranche) and Buzzfeed ($200M Series G).

($260M Series F tran che) and Buzzfeed ($200M Series G). 250 198 167 181 200 171

250

198 167 181 200 171 173 158 155 129 150 100 50 $1.7 $2.3 $2.4
198
167
181
200
171
173
158
155
129
150
100
50
$1.7
$2.3
$2.4
$2.2
$2.7
$1.5
$1.7
$2.0
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($B)
# of Deals
# Deals
8-quarter financing trend:
8-quarter financing trend:

DC/Metroplex

DC/Metroplex financing propelled by OneWeb deal

• On a full-year basis, dollars invested in DC/Metroplex companies was up 26% from 2015, while total deal activity ticked down 5%.

• Of course, OneWeb’s deal accounted for the lion’s share of Q4’16 funding with its $1.2B round, the largest to any VC-backed company (US or global) of the quarter.

to any VC-backed company (US or global) of the quarter. 55 60 52 50 50 43
55 60 52 50 50 43 43 41 40 38 40 30 20 10 $445
55
60
52
50
50
43
43
41
40
38
40
30
20
10
$445
$432
$506
$767
$434
$210
$622
$1,441
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($M)
# of Deals
# Deals
8-quarter financing trend:
8-quarter financing trend:

New England

Annual deals and dollars decline in New England

• Deal activity in New England has been relatively consistent through 2016, but has declined 19% from full-year 2015 to 435 deals. Annual funding was also down 12% to $6.2B.

• The funding spike in Q3’16 was a relative outlier for the year, with biotech firms Moderna and Intarcia Therapeutics, as well as daily fantasy site DraftKings, all receiving $150M+ deals.

daily fantasy site DraftKings, all receiving $150M+ deals. 180 157 160 138 122 123 140 112
180 157 160 138 122 123 140 112 111 108 104 120 100 80 60
180
157
160
138
122
123
140
112
111
108
104
120
100
80
60
40
20
$1.5
$2.2
$1.8
$1.6
$1.5
$1.2
$2.2
$1.3
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($B)
# of Deals
# Deals
8-quarter financing trend:
8-quarter financing trend:

LA/Orange County

In LA/Orange County, Snap fuels funding, but deal activity falls

• As with other regions, deal activity has generally trended downward for the year, with 2016’s total of 278 deals down 18% from 2015. Total financing was up 13% to $5B, buoyed by Snap (fka Snapchat).

• Q4’16 saw a variety of companies in the region receiving $50M+ rounds, such as transportation developer Hyperloop One, construction software company Procore, and VR gaming startup Survios.

software co mpany Procore, and VR gaming startup Survios. 120 97 91 100 83 85 70

120

97 91 100 83 85 70 70 69 80 54 60 40 20 $679 $1,621
97
91
100
83
85
70
70
69
80
54
60
40
20
$679
$1,621
$1,128
$977
$963
$2,474
$647
$879
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($M)
# of Deals
# Deals
US: Top 10 states by deal value
US: Top 10 states by deal value

1. CA

 

$5,060M

6. IL

$225M

394

Deals,

39

Deals,

 

Avg. Deal Size: $12.8M

Avg. Deal Size:$5.8M

2. NY

$1,698M

7. NJ

$209M

124

Deals,

9 Deals, Avg. Deal Size:$23.2M

 
 

Avg. Deal Size:$13.7M

3.
3.

VA

4.
4.

MA

5.
5.

WA

$1,346M

19

Deals,

Avg. Deal Size:$70.8M

$1,270M

97

Deals,

Avg. Deal Size:$13.1M

$322M

34

Deals,

Avg. Deal Size:$9.5M

8.

TX

9.
9.

UT

$13.1M $322M 34 Deals, Avg. Deal Size: $9.5M 8. TX 9. UT 10. NC $181M 44

10. NC

$181M

44

Avg. Deal Size:$4.1M

Deals,

$170M

19

Deals,

Avg. Deal Size:$8.9M

$167M

15

Deals,

Avg. Deal Size:$11.1M

US: Top 20 states based on total dollars invested in the last 20 years Pennsylvania

US: Top 20 states based on total dollars invested in the last 20 years

states based on total dollars invested in the last 20 years Pennsylvania $17.7B Minnesota New York
Pennsylvania $17.7B Minnesota New York $8.2B $58.3B Washington Illinois Massachusetts $23.8B $16.3B $80.0B
Pennsylvania
$17.7B
Minnesota
New York
$8.2B
$58.3B
Washington
Illinois
Massachusetts
$23.8B
$16.3B
$80.0B
Oregon
Connecticut
$4.3B
$9.7B
New Jersey
Ohio
$20.1B
$5.6B
Maryland
Utah
Colorado
$12.9B
$6.9B
$21.0B
Virginia
California
$17.2B
$367.8B
North
Arizona
Carolina
$4.7B
$10.9B
Georgia
Texas
$14.2B
$38.6B
Florida
$14.7B
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year

04

04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016

US Movers and Shakers:

Q4’16

04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
04 US Movers and Shakers: Q4’16 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016
Largest Deals Stage of $ Value Company Location Sector Industry Select Investors Funding of Deal
Largest Deals
Stage of
$ Value
Company
Location
Sector
Industry
Select Investors
Funding
of Deal
 

Mobile &

Telecom

  Mobile & Telecom  
 

OneWeb

Arlington, VA

Telecom

Services

$1.2B

SoftBank Group

 

Business

  Business  
 

WeWork

New York, NY

Products &

Facilities

$260M

Jinjiang International Group

 

Services

 
 

Internet

  Internet   Norwest Venture Partners, New Enterprise Associates, Khosla Ventures, Felicis Ventures
 

Norwest Venture Partners, New Enterprise Associates, Khosla Ventures, Felicis Ventures

OpenDoor Labs

San Francisco, CA

Internet

Software &

$210M

 

Services

Intarcia

Pharma. /

Intarcia Pharma. /  
 

Therapeutics

Boston, MA

Healthcare

Drugs

$206M

Bill & Melinda Gates Foundation

 

Internet

  Internet  
 

Buzzfeed

New York, NY

Internet

Software &

$200M

NBCUniversal

 

Services

 
$ 2 0 0 M NBCUniversal   Services   PwC | CB Insights MoneyTree™ Report Q4
$ 2 0 0 M NBCUniversal   Services   PwC | CB Insights MoneyTree™ Report Q4
$ 2 0 0 M NBCUniversal   Services   PwC | CB Insights MoneyTree™ Report Q4
$ 2 0 0 M NBCUniversal   Services   PwC | CB Insights MoneyTree™ Report Q4

PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016

Seed

Early

Expansion

Later

30

Stage

Stage

Stage

Stage

Most active venture capital firms No. of Investor Location Select Q4’16 Investments Companies
Most active venture capital firms
No. of
Investor
Location
Select Q4’16 Investments
Companies

1. New Enterprise Associates

Mountain View, CA

17

OpenDoor Labs, VidMe, Datrium, TravelBank

2. 500 Startups

Mountain View, CA

16

Albert, Fingertips Lab, Prynt, Happy Inspector

3. True Ventures

Palo Alto, CA

13

Baffle, Cloverpop, Zymergen, Tend AI

4. General Catalyst Partners

Cambridge, MA

13

Lemonade, Elysium Health, Stripe, Sunflower Labs

5. Khosla Ventures

San Francisco, CA

13

Genalyte, Ellevest, Message.io, OpenDoor Labs

05 Global Trends:
05
Global Trends:
05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year

Q4’16 & Full-year 2016

05 Global Trends: Q4’16 & Full-year 2016 PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
Global: Global regions comparisons
Global: Global regions comparisons
Deals $12.2B 1065 Deals
Deals
$12.2B
1065 Deals
Deals $3.0B $5.5B 498 Deals 337 Deals
Deals
$3.0B
$5.5B
498 Deals
337 Deals
$12.2B 1065 Deals Deals $3.0B $5.5B 498 Deals 337 Deals PwC | CB Insights MoneyTree™ Report
Overall Financing Trends
Overall Financing Trends

Financing globally to VC-backed companies hits deal and dollar lows:

• Deal count dropped below 2000 for the first time since Q4’13. In the whole of 2016,VC-backed companies received $100.8B across 8,372 deals (down 23% and 10%, respectively).

• Funding also fell for the second-straight quarter, seeing just $21B invested in Q4’16. This represents an 89% drop since the 8-quarter peak in Q3’15, which saw nearly $40B in funding.

• Q4’16 only saw a single deal above $1B, and 32 rounds above $100M. There were 38 $100M+ rounds the same quarter a year earlier.

were 38 $100M+ rounds the same quarter a year earlier. 3,000 2,428 2,371 2,318 2,500 2,138
3,000 2,428 2,371 2,318 2,500 2,138 2,186 2,082 2,133 1,971 2,000 1,500 1,000 500 $28.4
3,000
2,428
2,371
2,318
2,500
2,138
2,186
2,082
2,133
1,971
2,000
1,500
1,000
500
$28.4
$35.2
$39.7
$28.2
$27.1
$28.3
$24.4
$21.0
0
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2 '16
Q3 '16
Q4 '16
Amount Invested ($B)
# of Deals
# Deals
Thematic areas of interest
Thematic areas of interest

Global venture capital (VC) financings ended 2016 on a cautionary note. The soft IPO market and rationalization of market valuations toned down investor enthusiasm with both valuations and number of new financings experiencing sequential and year-over-year declines. The decline was not unusual, given the spike in investor interest in 2015, which led to minting of a record number of Unicorns. Absence of major Unicorn IPOs in 2016 also influenced investor enthusiasm toward new investments. VC investment trends in 2017 will be impacted by the reaction of capital markets to upcoming Unicorn IPOs, as strong investor receptiveness to IPOs generally boosts VC investments.

receptiveness to IPOs generally boosts VC investments. — Raman Chitkara , Partner, PwC ” PwC |

— Raman Chitkara, Partner, PwC

Trends:
Trends:

Europe

Europe beats the global slowdown

• In Q4’16, both deals and dollars went up in Europe. Funding jumped by 22%, hitting $3B of investment in the quarter. Deals increased for a third-consecutive quarter, hitting 498 deals.

Healthcare saw the biggest jump in funding (113%), breaking $700M in Q4’16. Mobile deals jumped, 27% from 71 deals in Q3’16 to 90 this past quarter.

• Corporate participation reached a 5-quarter high, with a quarter of all deals into VC-backed companies including a corporation or its venture arm.

• Europe saw zero new VC-backed unicorns in the quarter.

• Europe saw zero new VC-backed unicorns in the quarter. Percentage change in dollars invested Q4/Q3
Percentage change in dollars invested Q4/Q3 2016
Percentage change in dollars invested Q4/Q3 2016
quarter. Percentage change in dollars invested Q4/Q3 2016 22% Rise in Europe funding compared to Q3’16

22%

Rise in Europe funding compared to Q3’16

Q4/Q3 2016 22% Rise in Europe funding compared to Q3’16 113% Healthcare PwC | CB Insights

113%

Healthcare

Trends: Asia
Trends:
Asia

Asia continues to stall:

• Asia decreased in both deals and dollars in Q4’16, dropping to $5.5B in funding for the quarter, down 25% from $7.3B the quarter before. There were 337 deals into VC-backed Asian companies, the third quarter in a row below 400.

• Every major sector in Asia saw a slowdown in Q4’16, with internet companies dropping the most by 43% in funding. Conversely, non-internet/mobile software jumped by 178%, fueled by a $120M Series B to computer vision developer SenseTime.

• While Q3’16 saw corporates participate in 43% of all deals in Asia, we saw a pullback and reversion to the norm with corporate participation reaching 34%.

• Early-stage deal size jumped from $2M in every other quarter in 2016, to $3M in Q4’16.

Percentage change in dollars invested Q4/Q3 2016
Percentage change in dollars invested Q4/Q3 2016
in Q4’16. Percentage change in dollars invested Q4/Q3 2016 25% Drop in Asia funding compared to
in Q4’16. Percentage change in dollars invested Q4/Q3 2016 25% Drop in Asia funding compared to

25%

Drop in Asia funding compared to Q3’16

Q4/Q3 2016 25% Drop in Asia funding compared to Q3’16 43% Internet PwC | CB Insights

43%

Internet

Trends: North America
Trends:
North America

North America sees funding low:

• North America saw $12.2B invested across 1,065 deals. This is the first time funding into the area has dropped below $13B since Q1’14.

• While the US dropped in funding, Canada saw a jump of 49% between Q3’16 and Q4’16.

• Internet and Healthcare saw a significant slowdown, dropping by 16% and 17%, respectively since the last quarter. Mobile had a stronger quarter, seeing a slight uptick in Q4’16 with 163 deals, a jump of 10% from Q3’16.

• Early-stage median deal size increased for the third-straight quarter, hitting a high of $3M.

Percentage change in dollars invested Q4/Q3 2016
Percentage change in dollars invested Q4/Q3 2016
of $3M . Percentage change in dollars invested Q4/Q3 2016 15% Drop in North America funding
of $3M . Percentage change in dollars invested Q4/Q3 2016 15% Drop in North America funding

15%

Drop in North America funding compared to Q3’16

2016 15% Drop in North America funding compared to Q3’16 49% Canada PwC | CB Insights

49%

Canada

Largest Deals
Largest Deals
Stage of $ Value Company Location Sector Industry Select Investors Funding of Deal Mobile &
Stage of
$ Value
Company
Location
Sector
Industry
Select Investors
Funding
of Deal
Mobile &
Telecom
OneWeb
Virginia, US
$1.2B
SoftBank Group
Telecom
Services
Mobile
Mobile &
Yixia
Beijing, China
Software &
$500M
Telecom
Shanghai Media Group, Sina
Weibo
Services
Careem
Networks
Dubai, United Arab
Emirates
Mobile &
Mobile
$350M
Telecom
Commerce
The Abraaj Group, Rakuten,
BECO Capital
Innovent
Suzhou, China
Healthcare
Drug Mfr.
$385M
Biologics
Ping An Insurance, Legend
Capital, Temasek Holdings
Business
WeWork
New York, NY
Products &
Facilities
$260M
Jinjiang International Group
Services
Facilities $260M Jinjiang International Group Services PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
Facilities $260M Jinjiang International Group Services PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
Facilities $260M Jinjiang International Group Services PwC | CB Insights MoneyTree™ Report Q4 and Full-Year
Facilities $260M Jinjiang International Group Services PwC | CB Insights MoneyTree™ Report Q4 and Full-Year

PwC | CB Insights MoneyTree™ Report Q4 and Full-Year 2016

Seed

Early

Expansion

Later

39

Stage

Stage

Stage

Stage

Most active venture capital firms No. of Investor Location Select Q4’16 Investments Companies
Most active venture capital firms
No. of
Investor
Location
Select Q4’16 Investments
Companies

1. 500 Startups

California, US

45

Talent Garden, Pomelo, Happy Inspector, Prynt

2. New Enterprise Associates

California, US

20

Opendoor Labs, GoEuro, Databricks, Datrium

3. Intel Capital

California, US

16

SigFox, Cloudian, Paxata, Carecloud

4. Index Ventures

London, UK

14

Hollar, Glossier, Iterable, SafetyCulture

5. General Catalyst Partners

Massachusetts, US

14

Stripe, Lemonade, Elysium Health, Singular

6. Accel Partners

California, US

14

Freshdesk, Paxata, Osmo, JobToday

7. Bessemer Venture Partners

New York, US

14

WellTok, SendGrid, Quantopian, Periscope Data

Appendix

US States: Full listing

US States: Full listing

State

$M

No. of

Deals

State

$M

No. of

Deals

Alabama

$5

1

Illinois

$226

39

Arizona

$44

10

Indiana

$14

8

California

$5,060

394

Iowa

$15

2

Colorado

$118

24

Kansas

$9

3

Connecticut

$84

4

Kentucky

<$1

2

DC

$50

6

Louisiana

N/A

1

Delaware

$1

1

Maine

$3

1

Florida

$99

10

Maryland

$38

12

Georgia

$34

7

Massachusetts

$1,270

97

Idaho

$2

1

Michigan

$15

10

State

$M

No. of

Deals

Minnesota

$56

3

Missouri

$4

6

Montana

$5

3

Nebraska

N/A

1

Nevada

$12

4

New Jersey

$209

9

New York

$1,698

124

North

Carolina

$167

15

Ohio

$142

16

Oklahoma

N/A

1

No disclosed quarterly activity: AK, AR, HI, MS, NH, NM, ND, SD, WY

State

$M

No. of

Deals

State

$M

No. of

Deals

Oregon

$31

8

West Virginia

$7

1

Pennsylvania

$92

18

Wisconsin

$69

6

Rhode Island

$12

5

South

Carolina

$2

2

Tennessee

$67

8

Texas

$181

44

Utah

$170

19

Vermont

<$1

1

Virginia

$1,346

19

Washington

$322

34

Notes on methodology

Notes on methodology CB Insights and PwC encourage you to review the methodology and definitions employed

CB Insights and PwC encourage you to review the methodology and definitions employed to better understand the numbers presented in this report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if you feel your firm has been underrepresented, please send an email to info@cbinsights.com and we can work together to ensure your firm’s investment data is up-to-date.

Unless otherwise noted, percent changes reflect deal value changes from the preceding quarter (e.g., from Q3’16 to Q4’16). Rankings are done by quarterly deal value (that is, total funding dollars for Q4’16).

What is included:

Equity financings into emerging companies. Fundings must come from VC-backed companies, which are defined as companies who have received funding at any point from either: venture capital firms, corporate venture group or super angel investors.

Fundings of only private companies. Funding rounds raised by public companies of any kind on any exchange (including Pink Sheets) are excluded from our numbers, even if they received investment by a venture firm(s).

Only includes the investment made in the quarter for tranched investments. If a company does a second closing of its Series B round for $5M and previously had closed $2M in a prior quarter, only the $5M is reflected in our results.

Round numbers reflect what has closed – not what is intended. If a company indicates the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount which has closed.

Only verifiable fundings are included. Fundings are verified via (1) various federal and state regulatory filings; (2) direct confirmation with firm or investor; (3) press release; or (4) credible media sources.

Geography note: Israel funding figures are classified in Asia.

What is excluded:

No contingent funding. If a company receives a commitment for $20M subject to hitting certain milestones but first gets $8M, only the $8M is included in our data.

No business development / R&D arrangements whether transferable into equity now, later or never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity financing nor is it from venture capital firms. As a result, it is not included.

No buyouts, consolidations or recapitalizations. All three of these transaction types are commonly employed by private equity firms and are tracked by CB Insights. However, they are excluded for the purposes of this report.

No private placements. These investments, also known as PIPEs (Private Investment in Public Equities), even if made by a venture capital firm(s).

No debt / loans of any kind (except convertible notes). Venture debt or any kind of debt / loan issued to emerging, startup companies, even if included as an additional part of an equity financing is not included. If a company receives $3M with $2M from venture investors and $1M in debt, only the $2M is included in these statistics.

No government funding. Grants, loans or equity financings by the federal government, state agencies, or public-private partnerships to emerging, startup companies are not included.

Data is current as of January 9, 2017. PricewaterhouseCoopers and CB Insights have taken responsible

Data is current as of January 9, 2017. PricewaterhouseCoopers and CB Insights have taken responsible steps to ensure that the information contained in the MoneyTree™ Report has been obtained from reliable sources. However, neither PwC nor CB Insights can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time.

© 2017 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.