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Posts Tagged ‘CB Insights’

PricewaterhouseCoopers and CB Insights’ Q2 2018 MoneyTree report highlights the latest trends in venture capital funding globally.

REPORT HIGHLIGHTS:

US HITS RECORDS FOR DEALS, DOLLARS, AND MEGA-ROUNDS

Dollars were up 2% in Q2’18 as a record $23B was invested across 1,416 deals. 45 mega-rounds of $100M or more contributed to the strong quarterly funding total.

 

 

ASIA FUNDING CONTINUES TO RISE, WITH 10% INCREASE FROM Q1’18
Total quarterly funding to Asia-based companies increased 10% in Q2’18 as $21.2B was invested across 1,300 deals.
SILICON VALLEY DECREASED IN DEAL ACTIVITY

Silicon Valley deal activity declined to 166 deals in Q2’18, down from 170 in Q1. Total funding increased slightly to $3.9B. While San Francisco deals increased to 271, up from 260 in Q1.

 

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The R.I.P. Report – Startup Death Trends

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Companies typically die around ~20 months after their last financing round and after having raised $1.3 million. Companies in the social industry saw the highest of number of startup failures in the period in question.

Want to identify acqui-hire targets? Get our list of dying tech companies.

Earlier, we’d described how the acqui-hire has become the exit du jour for startups struggling to stay afloat. While the acqui-hire does provide a nice alternative to death, it is a fairly recent phenomenon and is by no means a guarantee. For most tech companies whose intellectual property or talent is not compelling enough to catch the eye of the Googles, Facebooks, or Yahoos of the world, the cold hard reality is death. (See our compilation of 51 startup failure post-mortems)

We wanted to take a look at CB Insights data on tech companies that died between 2010 and 2013 to see what we can learn about startup mortality.  A few notes first:

  1. Startup death is surprisingly hard to identify.  Many startups are essentially dead but limp along for years in zombie-like fashion. So although on life support, these walking dead startups are not included in this analysis since they’re not officially deceased.  Shikhar Ghosh, a senior lecturer at Harvard, who’d studied startup mortality found that “VCs bury their dead very quietly” further compounding the issue of identifying dead companies.
  2. Survivorship bias reigns.  We tend to fawn over the few billion dollar exits and hear little of the failures. As a result, there is less data out there about startup death. Ultimately, this is bad for the ecosystem as Jason Cohen explains in his essay on the topic of survivorship bias, “The fact that you are only learning from success is a deeper problem than you imagine”, but this is a topic for another day.
But despite those challenges, we are increasingly tracking startup mortality data. In our efforts to algorithmically rate private companies, it’s critical to understand both the successes and failures to train our models.
Without further delay….

In each year since 2010, 70% of all dead tech companies have been in the internet sector. This is hardly a surprise as within tech, a majority of funding and deals has gone to the internet sector and so it would follow that the sector would have the largest proportion of dead companies.  The % of companies dying within the internet sector has stayed relatively range bound over the last several years as well.

Mobile has seen far more volatility in terms of its share of dead companies.  Mobile talent being highly coveted has made these firms a prime target for acqui-hires but as investors pour billions into mobile-first companies, it is likely the # of failed mobile startups will also climb.


Most Dead Companies Died Before Raising >$1M

 

55% of failed startups raised $1M or less, and almost 70% companies died having raised less than $5M overall.  Not a big surprise. Companies at the earliest stages are the most vulnerable due to limited financial runway, immature products and businesses and general uncertainty about whether the market needs what they’ve built.  This is why we’ll see more startup orphans.

While the dead companies on our list raised $11.3M on average, the median funding raised which is a better measure in this case was $1.3M.

20 months: The Average Time Between a Company’s Last Funding Round and Death

 

71% of the dead companies lasted less than two years after their last funding round. While some companies can take up to five years after their last funding round to be officially declared dead, the average company dies ~20 months from its last funding round in the absence of additional funding or acquirers. The median time is 16.5 months, or a little under a year and a half. In comparison, getting acquihired on average takes 2-4 fewer months, so if you haven’t seen either more capital or an interested acquirer by the 15-month mark, things are not looking good.  The line between death and an acqui-hire especially is quite thin.

Death is not specific to a particular type of sector or industry. In fact, the companies on our dataset represent a fairly diverse set of subindustries. To help you identify what’s not hot, the subindustries with the most dead companies, both over the past four years and in 2013, are shown below.

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Slowdown In The East: Deals And Funding To Startups Sputter In India and China

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Deal volume in China fell nearly 39% quarter-over-quarter in Q4’15, a drop 3x steeper than the global pullback.

Venture funding and deal activity in Asia took a serious dip in Q4’15 compared to Q3’15. Not surprisingly, this also held true in Asia’s two largest markets: China and India.

In the KPMG and CB Insights 2015 Venture Capital Report, we dug into global investment data including regional looks at Europe, Asia, and North America, as well as analyses of the funding climates in China and India.

Free Report: The Q4’15 U.S. Venture Capital Report
A data-driven analysis of venture capital deals and dollars from Q4 2015

China investment trends

Deal volume in China fell nearly 39% quarter-over-quarter in Q4’15 to 71 deals, the lowest amount for deal activity in at least 5 quarters (a more dramatic drop than the 13% fall in deal count globally). In terms of funding dollars invested, there was a 29% drop in China over the same period (roughly the same as the 30% drop in venture funding globally).

China was home to 8 of the top 10 biggest deals in Asia in 2015, the largest of which was China Internet Plus Holding‘s $2.8B mega-round in Q4’15

The top city for deals was Beijing, which saw $1.7B invested over nearly 30 deals. But Shanghai saw far larger deals on average, accumulating $5.3B in investment over roughly two-dozen deals.

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India investment trends

The slowdown was even more profound in India, where Q4’15 represented a 46% drop in funding dollars quarter-over-quarter. Deal count also took a hit, falling 18%.

India also saw 2 of Asia’s 10 largest deals in 2015: Olacabs‘ $175M Series F and IIFL Wealth Management‘s $173M growth round. Mumbai was the most active city for deals, with $631M in funding occurring across 20+ deals. The next largest market was Bangalore, which saw $357M in funding.

 

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VC Snapshot: October

PitchBook November 03, 2015

October closed with nearly $7.4 billion of capital invested in venture rounds globally, a relatively modest amount compared to past months. The month didn’t end without its fair share of large deals and mega-valuations, however. Eight companies received funding at a valuation of $1 billion or higher, including 23andMe scoring $115 million at a valuation of $1.1 billion and AppDirect bringing in $140 million in late-stage funding at a valuation of $1.35 billion. SaaS platforms received the largest percentage of the deal flow at almost 30%, while roughly half of the total capital invested was distributed over the 45 largest financing rounds of the month.

Source: PitchBook

Source: PitchBook

 

647 different VC investors were active during October, 21 of which participated in five or more deals. New Enterprise Associates led all VC investors by completing 16 investments, followed closely by Sequoia Capital and Accel Partners at 15 and 12 deals, respectively. 418 (65%) of the active firms are headquartered in North America; 21% are based in Europe.

Hedge fund Coatue Management closed the largest VC-focused fund of the month with its Coatue Private Fund II ($1B), which will focus on late-stage and growth financings of telecomm, media and technology companies. 16 vehicles closed on $100 million or more, including Y Combinator Continuity Fund I ($700M), U.S. Venture Partners XI ($281M) and Highland Europe Technology Growth II ($373M).

Capital exited eclipsed $4.4 billion in October, with 85 VC-backed exits completed via buyout, IPO or acquisition. A total of 75 companies were acquired, one of the largest being medical device company Twelve, which was acquired by Medtronic for $458 million. Of the 10 IPOs that were completed, seven included companies in the healthcare industry, though IT company Pure Storage completed the largest offering by raising $425 million.

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Boo: The increasingly crowded unicorn club in one infographic
In honor of Halloween, here is our scariest infographic ever. We visualize the rise of unicorn companies since 2011. So much for unicorns being mythological.

https://www.cbinsights.com/blog/increasingly-crowded-unicorn-club/?utm_source=CB+Insights+Newsletter&utm_campaign=dd8c09211b-Top_Research_Briefs_10_31_2015&utm_medium=email&utm_term=0_9dc0513989-dd8c09211b-86855673

 

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Global Venture Capital Report – Q3 2015 KPMG and CB Insights: VC-backed Companies Haul in US$37.6 Billion Globally in Q3 2015 Due to Mega-Rounds and Continued Crossover Investor Activity- from CB Insights

An in-depth analysis into the financing trends including unicorn growth, mega-rounds, country breakdowns, the most active investors, and more.

https://www.cbinsights.com/research-q3-2015-venture-capital-report?goal=0_9dc0513989-5882a30484-86855673

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The Non-Dotcom Bubble: The World’s Most Popular Startup Domains Other Than .Com

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.com is still the king of suffixes. But startups are also flocking to other domains, including .io.

Download the Q2 2015 Global Venture Capital Report

In a recent essay, Paul Graham recommended that startups should own their .com domain name or risk being considered marginal or weak. However, .com domains can be very expensive, especially for younger startups. We used the CB Insights database to analyze the trends in startup domain suffixes over time, such as the rise of the .io suffix.

Traditional .com domains still dominate amongst the more than 25,000 tech companies funded since 2010, with 20,000+ companies choosing a .com domain for a 81% share of all suffixes.

But other domain suffixes are also popular. These include .net and .co domains, which proved to be the most popular, followed by .io which saw nearly 350 funded tech companies choosing that domain. After the top 3, the list is populated mostly by more geography-specific domains such as .de (Germany), .cn (China), and .jp (Japan). Also, .tv has been used by more than 100 companies, including well-known services Twitch.tv, blip.tv, and acfun.tv. The .ly domain, often considered  a go-to suffix for Silicon Valley startups, isn’t really all that popular.

Most Popular Suffixes

With a flurry of new domains having been made available by ICANN recently starting in 2014, startups will increasingly seize the opportunity and flock to alternative domain suffixes. But many of the newest suffixes like .global are not showing up on the radar just yet.

Top non-dotcom suffixes

Among the top URLs, some have seen more growth than others in recent years.

  • The .co domain saw the largest spike, with a 93% jump in the number of new companies being funded with that domain suffix between 2013 and 2014.
  • Both .io and .in have seen steady growth, and have already reached all time highs in 2015 in terms of registrations for funded companies.
  • .net domains, while having the most funded tech companies in total since 2010 (after .com), has slowed significantly in growth, with only 61 companies being funded with that domain name through mid-August 2015.

URL popularity by year

Unique suffixes per year

The number of unique domain suffixes attached to startups in a given year saw a significant jump between 2011 and 2012. There were 116 separate domain suffixes used by startups this year through mid-August 2015, almost double the amount in full-year 2010.

Unique URLs by Year

New suffixes

It’s not uncommon to see new domain suffixes pop up when looking at startups receiving funding (i.e., suffixes that have never been attached to a tech startup before). Below are select new domain suffixes that have been funded recently as well as the companies attached to them. In 2015, we saw new startups with .soy and .world suffixes. Some are country-level geographic suffixes, e.g. .dj is Djibouti.

Select Newly Funded Domain Suffixes
Year Suffix Select Companies
2012 .global, .om, .gg, .pro bluedot.globalpinion.ggbad.gycpac.pro
2013 .dj, .ae, .bi, .sr plug.dj, propertyfinder.ae, bbs.bi, hairdres.sr
2014 .limo, .life, .works, .today loup.limo, league.life, weave.works, celuv.today
2015 YTD .ventures, .world, .soy, .pictures entangled.ventures, myeye.world, bevisible.soy, folio.pictures

 

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