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V E N T U R E C A P I T A L R E P O R T

Venture Capital Report U.S. | 1Q | 2018


VENTURE CAPITAL REPORT

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation,

and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 1Q 2018 include:

•  U.S. venture capital fundraising increased in amount invested and in number of funds

•  Venture capital investment into U.S. companies reached the highest level of the last three years

•  Amount raised through initial public offerings (IPOs) decreased in the first quarter of 2018, mergers and acquisitions (M&As) also fell compared to the

previous quarter

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GROWTH EQUITY

Starting this quarter, we are reporting on Growth Equity. VentureSource has always tracked this space, but until now they were excluded from the

quarterly statistics. Please note that Growth deals will be included in the Later Stage category, a subsection of Venture Capital Investment. We define

Growth Equity as a minority stake investment in privately owned, mature companies that meet the following criteria:

•  No prior equity investment within the first 3 years of business operations; and

•  A proven business model -- generating revenue or profitable; and

•  No VC-type round series is used by the company to label the transaction; and

•  At least one institutional investor participated in the deal.

We recently reviewed our entire database to ensure that all companies and transactions are classified consistent with the above criteria. As a result of

this review, we re-characterized thousands of historical deals from VC to Growth, or from Growth to VC.

As with our Venture Capital statistics, we exclude companies formed for the sole purpose of acquiring other companies, properties, natural resources, or

interests. We also exclude companies formed or owned by private equity firms.

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VENTURE FUNDRAISING INCREASES IN U.S. DURING 1Q 2018

4

FUNDRAISING

U.S. VC Fundraising (2014–2018) Based on multiple closings

140 venture capital funds collected $8.78 billion in 1Q 2018, a

68% increase in the amount raised, along with a 2% growth in

the number of funds from the prior quarter.

Norwest Venture Partners XIV LP was the largest

U.S. venture capital fund of 1Q 2018, raising $1.5 billion and

accounting for 17% of the total venture capital financing

raised during the quarter.

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Amount Raised ($B) $9.03 $13.75 $5.76 $9.14 $14.35 $11.91 $8.78 $9.43 $8.19 $14.37 $9.85 $5.21 $8.78

Number of Funds 82 115 77 103 131 119 116 144 171 158 121 137 140

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LARGEST VC FUNDS RAISED IN 1Q 2018

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FUNDRAISING

Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type

Norwest Venture Partners Norwest Venture Partners

XIV LP $1,500.00 Palo Alto CA Closed Multi-stage

venture capital

Venture Capital Final

General Catalyst Partners General Catalyst Group IX

LP $1,375.00 Cambridge MA Closed Multi-stage

venture capital Venture Capital Final

Battery Ventures Battery Ventures XII LP $800.00 Boston MA Closed Multi-stage


Ampersand Capital Partners Ampersand 2018 LP $450.00 Wellesley MA Closed Multi-stage


Samsara BioCapital Samsara BioCapital LP $260.59 Palo Alto CA Open Multi-stage

venture capital Venture Capital First


U.S. EQUITY INVESTMENT IN 1Q 2018 INCREASES

U.S.-based companies raised $25.72 billion in 1303 equity

deals in 1Q 2018, which translates to an increase of 17% in

capital raised from the fourth quarter of 2017, with a 9%

increase in number of deals during the same period.

Healthcare received the highest amount of investment,

accounting for 26.62% and growing 21% from the last

quarter. Compared to the same period last year, there was

a slight increase of 4%.

Equity financing this quarter was the highest in the last

three years. When measured against the same period last

year, total capital invested rose by 30%.

6

FINANCING

Equity Financings into U.S.- Based, VC-backed Companies (2015–2018)

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Amount Raised ($B) $19.80 $23.15 $23.50 $23.53 $16.24 $20.36 $18.80 $13.62 $19.76 $20.93 $23.32 $21.66 $25.72

Number of Deals 1268 1383 1258 1329 1229 1225 1272 1124 1306 1341 1299 1211 1303

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Number of Deals

EQUITY FINANCINGS INTO U.S.–BASED, VC–BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)

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FINANCING

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Restart 5 5 3 2 4 4 3 1 6 1 4 0 2

Later 428 481 431 440 420 425 454 378 441 397 418 397 439

Second 238 260 212 225 222 230 201 186 211 195 206 171 195

First 347 382 376 375 342 343 338 320 318 312 260 237 273

Seed 90 115 99 120 99 73 103 89 124 155 143 135 118

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Amount Raised ($B)

EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)

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FINANCING

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Restart $0.03 $0.09 $0.06 $0.02 $0.06 $0.04 $0.54 $0.01 $0.08 $0.01 $0.05 $0.00 $0.03

Later $13.20 $15.52 $15.35 $16.60 $10.31 $10.63 $12.01 $7.66 $10.71 $12.86 $14.69 $13.52 $14.30

Second $3.12 $3.66 $3.70 $3.01 $2.25 $2.72 $2.37 $2.19 $3.90 $3.07 $3.50 $3.07 $4.23

First $2.12 $2.42 $2.57 $2.78 $2.09 $2.26 $2.93 $1.95 $3.64 $2.90 $2.13 $2.77 $4.25

Seed $0.08 $0.11 $0.09 $0.12 $0.13 $0.10 $0.10 $0.13 $0.16 $0.34 $0.32 $0.33 $0.32

$0.00

$2.00

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$16.00

$18.00


EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE ($M) (2015–2018)

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FINANCING Median Equity Deal Size ($M)

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Median Equity Deal Size ($M) $5.00 $5.00 $5.09 $5.00 $4.60 $4.83 $5.00 $5.00 $5.00 $5.60 $5.31 $6.00 $6.30

$0.00

$1.00

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$7.00


EQUITY FINANCINGS INTO U.S.-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (1Q 2018)

Healthcare received the largest investment allocation during 1Q’18 (27% of total),

accumulating $6.85 billion through 250 deals. While the number of deals

decreased in this quarter compared with 4Q’17, the amount invested in

healthcare rose 21%.

Business and Financial Services took second place with $5.89 billion across 321

deals. Compared to the performance of this sector in the last quarter, the

numbers signify a 15% increase in deal flow along with a substantial rise of 39%

in the amount raised. The sector’s investment figure represents approximately

23% share of total equity investment into U.S. VC-backed companies for the

quarter.

Information Technology placed third this quarter in terms of equity financing,

accounting for 21% of all 1Q’18 investment. The 377 deals drew $5.32 billion, a

mere 4% increase in capital raised compared to the previous quarter.

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FINANCING 1Q'18 Industry Breakdown By Number of Deals

1Q’18 Industry Breakdown By Amount Raised ($B)

321

81

200 11 250

53

377

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

23%

6%

18%

0% 27%

5%

21%


Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology


TOP 5 DEALS INTO VC-BACKED COMPANIES (1Q 2018)

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FINANCING

Co. Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)

Uber Technologies Inc.

San Francisco, CA

Transportation Services

Travel and Leisure Consumer Services

Provider of an on-demand ridesharing

service. 1/18/2018 VC Later 1,250.00

TPG Capital LP, Tencent Holdings Ltd., Softbank Group Corp.*, Sequoia Capital, Dragoneer Investment Group

Katerra Inc. Menlo Park, CA Building

Construction Construction and Civil Engineering


Provider of services and solutions for the

construction industry. 1/24/2018 VC 2nd 865.00 SoftBank Vision Fund*

DoorDash Inc. San Francisco,

CA Restaurants/ Food Service

Travel and Leisure Consumer Services

Provider of an on-demand delivery

service that connects customers with local

businesses.

3/1/2018 VC 5th 535.00 Wellcome Trust Ltd., Softbank Finance Group*, Sequoia

Capital, GIC Private Ltd.

Moderna Therapeutics Inc.

Cambridge, MA Biotechnology Therapeutics

Biopharmaceuticals Healthcare

Developer of messenger RNA

(mRNA) therapeutics and vaccines.

2/1/2018 VC 6th 500.00

Viking Global Investors LP, Sequoia Capital, Pictet Asset Management SA, Julius Baer, Fidelity Management &

Research Co., EDBI Pte. Ltd., BB Biotech Ventures, ArrowMark Partners, Alexandria Venture Investments

Magic Leap Inc.* Dania Beach, FL Displays Electronics and

Computer Hardware Information Technology

Developer of an augmented reality visual computing

system.

3/7/2018 Other Equity 461.00 Saudi Arabia Public Investment Fund*

*According to WSJ Pro VC, the company had a second closing of a Series D round after reporting in October a $502 million round lead by Temasek. Venture Source Data reported on this financing in the previous quarter.


MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (1Q 2018)

1 2

FINANCING

27

24

18 17 17 17

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30

New Enterprise Associates Inc.

Y Combinator Khosla Ventures Andreessen Horowitz GV Greycroft Partners


NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (1Q 2018)

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FINANCING Number of Deals in 1Q 2018 by Primary Region

Amount Raised ($B) in 1Q 2018 by Primary Region

Number of Deals by Primary Region 1Q 2018 282

28

89

68

100

408

49

65

75

136

Mid-Atlantic Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Amount Raised ($B) by Primary Region 1Q 2018 $4.28

$0.39

$0.91

$0.95

$2.55

$10.58

$0.72

$0.99

$1.39

$2.95

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California


NUMBER OF DEALS/AMOUNT RAISED BY SUBREGION (1Q 2018)

1 4

FINANCING

Number of Deals by subregion 1Q 2018

Amount Raised ($B) by subregion 1Q 2018

Austin Metro 27 $0.47

Boston Metro 91 $2.51

Chicago Metro 39 $0.59 Dallas-Fort Worth 13 $0.25

Los Angeles Metro 84 $1.99

New York Metro 186 $3.16

Orange County 24 $0.30

Potomac 34 $0.57

San Diego Metro 21 $0.51

San Francisco Bay Area 405 $10.56

Seattle Metro 39 $0.59

Subregion Breakout Number of Deals

Subregion Breakout Amount Raised ($B)

27

91

39

13

84

186

24

34

21

405

39

Austin Metro

Boston Metro

Chicago Metro

Dallas-Fort Worth

Los Angeles Metro

New York Metro

Orange County

Potomac

San Diego Metro

San Francisco Bay Area

Seattle Metro

Number of Deals by Subregion

$0.47

$2.51

$0.59

$0.25

$1.99

$3.16

$0.30

$0.57

$0.51

$10.56

$0.59

Austin Metro

Boston Metro

Chicago Metro

Dallas-Fort Worth

Los Angeles Metro

New York Metro

Orange County

Potomac

San Diego Metro

San Francisco Bay Area

Seattle Metro

Amount Raised ($B) by subregion


VENTURE M&A AND IPO MARKET ACTIVITY IN THE U.S. DURING 1Q 2018

Mergers and acquisitions (M&As) for venture-backed

companies decreased 6% in value from 4Q 2017, with

120 deals garnering $17.31 billion.

During the same period, the number of IPOs declined

by 39%, as did the total amount raised. The

latter experienced a 19% decrease, falling to $1.63

billion.

1 5

LIQUIDITY

Exit Opportunities for U.S. VC–backed Companies (2015–2018)

0 20 40 60 80 100 120 140 160 180 200

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

4Q'17

1Q'18

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

IPOs 13 29 12 16 6 11 13 8 7 18 8 23 14

M&As 156 114 149 142 147 161 160 146 165 155 154 156 120


U.S. VC-BACKED M&As (2015-2018)

120 M&As of venture-backed companies in the U.S.

amounted to $17.31 billion during 1Q 2018.

•  Compared to 4Q 2017, when a total of 156

transactions accumulated $18.40 billion, both

number of deals and amount raised decreased by

23% and 6%, respectively.

•  The largest M&A of the quarter was

IO Data Centers LLC, which was acquired by Iron

Mountain Inc. (NYSE: IRM) for $1.34 billion.

1 6

LIQUIDITY

U.S. VC-backed M&A Activity (2015 - 2018)

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Amount Paid ($B) $15.66 $11.88 $19.71 $19.56 $24.01 $26.17 $25.89 $22.17 $23.24 $20.08 $22.10 $18.40 $17.31

Number of M&As 156 114 149 142 147 161 160 146 165 155 154 156 120

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TOP 3 U.S. M&As (1Q 2018)

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LIQUIDITY

Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M)

Acquirer

IO Data Centers LLC Phoenix, AZ

Provider of wholesale data center and

colocation services.

Data Management Services

Business Support Services

Business and Financial Services 1/10/2018 Acquisition $1,340.00

Iron Mountain Inc. (NYSE: IRM)

Impact Biomedicines Inc.* San Diego, CA

Developer of treatments for patients with

myeloproliferative neoplasms and other

types of cancer.

Biotechnology Therapeutics Biopharmaceuticals Healthcare 3/31/2018 Acquisition $1,100.00

Celgene Corp. (NASDAQ:

CELG)

Bot Home Automation Inc.

Santa Monica, CA

Provider of a wireless video camera doorbell

security device. Security Products

Aerospace and Defense

Industrial Goods and Materials 2/27/2018 Acquisition $1,000.00

Amazon.com Inc. (NASDAQ: AMZN)

*The company was acquired for $1.1 billion upfront and up to $ 1.25 billion in contingent payments based on regulatory approval milestones for myelofibrosis.


U.S. VC-BACKED IPOs (2015-2018)

14 venture-backed companies raised $1.63 billion through public

offerings in 1Q 2018.

•  Both number of deals and capital raised experienced a

significant drop from the last quarter, 39% and 19%,

respectively.

•  Despite the decline, Dropbox Inc.’s IPO raised almost twice as

much as last quarters’ biggest IPO. The company, now quoted

in the Nasdaq Stock Exchange under the DBX ticker symbol,

collected $563.27 million and was valued at $8.33 billion.

1 8

LIQUIDITY

U.S. VC-backed IPO Activity (2015 - 2018)

1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18

Raised ($B) through IPO $0.93 $2.57 $1.60 $1.36 $0.38 $0.79 $0.99 $0.69 $3.95 $1.75 $0.62 $2.02 $1.63

Number of IPOs 13 29 12 16 6 11 13 8 7 18 8 23 14

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TOP 3 U.S. IPOs (1Q 2018)

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LIQUIDITY

Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date

Round Type

Raised through IPO ($M) Exchange

Dropbox Inc. San Francisco,

CA Provider of cloud storage

services.

Business Applications

Software Software

Information Technology 3/23/2018 IPO $563 Nasdaq: DBX

Zscaler Inc. San Jose, CA Provider of multi-tenant

software-as-a-service (SaaS) security services.

Network / Systems Management

Software Software

Information Technology 3/16/2018 IPO $192 NASDAQ: ZS

Homology Medicines Inc. Bedford, MA

Developer of gene editing and gene therapy

technologies.

Biotechnology Therapeutics Biopharmaceuticals Healthcare 3/27/2018 IPO $144

NASDAQ: FIXX


ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and

partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It

provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of

development throughout the world.

The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource.

This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital

statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate,

individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice.

No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

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