Posts Tagged ‘CB Insights’

State Of Healthcare Q2’20 Report: Sector And Investment Trends To Watch


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



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.



Total quarterly funding to Asia-based companies increased 10% in Q2’18 as $21.2B was invested across 1,300 deals.

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


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


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.



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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