VC Funding Still Robust as Year-to-Date Total Exceeds 2013 (and Top 10 Deals)

Xconomy National — 

Venture capital activity is down from a 13-year high during the second quarter, but a new MoneyTree Report released today shows that venture funding was still going strong in the three months that ended Sept. 30, with $9.9 billion invested in 1,023 deals.

That was almost a 27 percent drop from the $13.5 billion that VCs invested in the previous quarter, and a 9 percent decline in deals, according to MoneyTree data—reinforcing the early returns from CB Insights on third-quarter venture capital activity.

The MoneyTree Report, prepared by Pricewaterhouse Coopers and the National Venture Capital Association from data provided by Thomson Reuters, doesn’t always align with the quarterly survey from CB Insights. Another source of data on VC activity, Dow Jones VentureSource, reported that VCs invested $11 billion in 899 deals nationwide over the three months that ended Sept. 30—but also showed that was a decline from a surge in the previous quarter.

The absolute numbers vary because of different criteria that each group uses to count venture deals, investment tranches, and types of deals. There even are significant differences between VentureSource and MoneyTree in listing the biggest venture deals each quarter. (Our list of MoneyTree’s Top 10 Deals is below.)

Nevertheless, all three sources show that venture funding is running at a higher rate in 2014 than it has in years. According to the MoneyTree Report, venture firms have invested more than $33 billion in U.S. startups through the first three quarters of 2014—already surpassing the $29.8 billion total that VCs invested in all of 2013.

Software continues to get more venture funding than any other sector, with VCs investing $3.7 billion in 418 deals in the third quarter, according to the MoneyTree Report. While that was down from the previous quarter, Internet-specific investments remained steady, as VCs invested almost $3.2 billion in 248 deals during the quarter.

Assuming venture investments of $9 billion or so in the fourth quarter, the total for 2014 should come in around $42 billion. That would be almost 41 percent more than last year’s total, and about 61 percent higher that the $26 billion average total over the previous five years.

The number of deals, however, is running at … Next Page »

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