Uber-Size Deals Dominate Mega Year in U.S. Venture Activity

Venture capital firms invested more than $47.3 billion in U.S. startups in 2014, marking the highest funding level of VC funding since 2001, according to data being released today by CB Insights, the New York-based venture capital database.

The $47.3 billion was 62 percent more than the $29.2 billion that venture firms invested in 2013. Yet much of the difference was due to a few dozen mega deals in which VC firms invested at least $100 million in a single round. Based on CB Insights data, the total count for venture deals in 2014 was 3,617, which was only 8 percent more than the 3,354 deals counted in 2013.

In the fourth quarter, a December surge of $7.1 billion that included mega investments in Uber and Snapchat drove VC funding to more than $13.5 billion in 884 deals.

That was nearly 69 percent more than the $8 billion that VCs invested during the fourth quarter of 2013, but again, the number of investment deals was only 4 percent more than the 849 deals in the year-ago quarter.

VC Activity 2014 CB InsightsMega deals involving Uber (which raised a total of $2.4 billion in two rounds last year), Snapchat, Instacart, and Square also drove venture funding in the mobile sector to a record $3.1 billion in the fourth quarter, and $7.8 billion for the year. The funding total in the mobile sector last year was more than double the $3.7 billion that VCs invested in 2013, but the 571 deals in 2014 was only 10 percent more than the 521 mobile deals counted in 2013.

Internet companies continued to attract the most venture capital, though, as VCs invested more than $19.6 billion in 1,675 deals last year. That was two-thirds more than the $11.8 billion that VCs invested in the Internet sector in 2013. Internet deal volume in 2014 was just 7 percent higher than the 1,562 deals counted that year.

Healthcare funding amounted to more than $8.2 billion in 2014, about 28 percent more than the $6.4 billion that went into healthcare in 2013. The deal count declined, however. CB Insights counted 537 healthcare deals in 2014, which was a 2 percent decline from the 550 deals counted in 2013.

While venture deal funding by stage remained within

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.