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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 . | 3 Q | 2 0 1 9
V E N T U R E C A P I T A L R E P O R T
VENTURE CAPITAL REPORT
The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital investment, fundraising, and liquidity. The
included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 3Q 2019 include:
• Equity investment retreated from recent highs, but still remained strong, with $27.53 billion invested in 1,295 deals.
• The IPO market turned in another powerful performance with $6 billion raised this quarter, and 2019 has already set a new annual record.
• M&A activity dipped modestly from the previous quarter, with $26.93 billion invested in 163 transactions.
• VC fundraising dipped slightly from 2Q but remained at historically high levels, with $12.04 billion raised across 126 fund closings.
2
V E N T U R E C A P I T A L R E P O R T
VC INVESTMENT PULLS BACK FROM RECENT HIGHS, BUT REMAINS ROBUST
VC-backed startups received $27.53 billion in 1,295
rounds this quarter, a noticeable decline of 17% and
14%, respectively, from 2Q. While the amount raised
was the lowest in nearly two years, it’s important to put
this figure in perspective: it qualified as the 9th largest
quarterly total on record, dating back to 1992. The
number of deals, however, was the smallest since 1Q
2014.
The top deal of the quarter went to San Francisco-based
OpenAI LP, which received corporate equity financing of
$1 billion from Microsoft.
3
FINANCING
Equity Financings in U.S.-Based,
VC-Backed Companies (2016–2019)
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Amount Raised ($B) $19.34$14.86$20.74$22.04$24.03$22.70$27.86$30.23$33.01$44.70$32.89$33.10$27.53
Number of Deals 1463 1328 1523 1577 1544 1419 1691 1692 1600 1532 1398 1504 1295
0
200
400
600
800
1000
1200
1400
1600
1800
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
V E N T U R E C A P I T A L R E P O R T
TOP ROUNDS FOR VC-BACKED COMPANIES (3Q 2019)
4
FINANCING
Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M)Round Investors
(* denotes lead)
OpenAI LPSan
Francisco, CA
Systems
SoftwareSoftware
Information
Technology
Provider of
artificial
intelligence
research
principles.
7/22/2019Corporate
Equity$1,000.00 Microsoft Corp.
Radiology
Partners Inc.
El Segundo,
CA
Outpatient
Facilities
Healthcare
ServicesHealthcare
Provider of
professional
radiology services.
7/19/2019 VC 4th $700.00 Starr Investment Holdings LLC*
Knotel Inc. New York, NY
Facilities/
Operations
Management
Business
Support
Services
Business
and
Financial
Services
Provider of flexible
office space.8/21/2019 VC 3rd $400.00
Wafra Inc.*; Rocket Internet AG; Norwest Venture
Partners; Newmark Knight Frank; Mori Trust Co.
Ltd.; Mercuria Investment Co. Ltd.; ITOCHU Corp.;
Bloomberg Beta
Urban Compass
Inc.New York, NY
Shopping
Facilitators
Consumer
Information
Services
Consumer
Services
Provider of a real
estate purchase
and rental
platform.
7/30/2019 VC 8th $370.00
SoftBank Vision Fund; Qatar Investment Authority;
Dragoneer Investment Group; Canada Pension
Plan Investment Board
Root Insurance
Co.
Columbus,
OHInsurance
Financial
Institutions and
Services
Business
and
Financial
Services
Provider of a car
insurance portal.9/3/2019 VC 5th $350.00
Tiger Global Management LLC; Scale Venture
Partners; Ribbit Capital LP; Redpoint Ventures;
DST Global*; Drive Capital LLC; Coatue
Management LLC*
V E N T U R E C A P I T A L R E P O R T
IT & BUSINESS SERVICES COMPANIES SPLIT LION’S SHARE OF VC FUNDING IN 3Q
IT companies once again grabbed the largest portion of VC deals
and dollars in 3Q, with $7.92 billion across 408 rounds. OpenAI had
the top deal in this sector (as well as the quarter overall), raising $1
billion.
Companies in the Business & Financial Services group came in
second place, securing $7.08 billion in 299 deals. New York-based
Knotel Inc. took the largest round in this space, with a $400 million
3rd round to fund its flexible office space services.
The Healthcare sector followed closely behind, raising $5.19 billion
across 242 deals. Radiology Partners Inc., an El Segundo-based
provider of professional radiology services delivered through a
technology-enabled national group practice, secured the top
financing in this sector.
5
FINANCING
Industry
Breakdown
By Number
of Deals
Industry
Breakdown
By Amount
Raised ($B)
299
86
184
15242
55
408
Business & Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
26%
3%
18%
1%19%
4%
29%
Business & Financial Services
Consumer Goods
Consumer Services
Energy & Utilities
Healthcare
Industrial Goods & Materials
Information Technology
V E N T U R E C A P I T A L R E P O R T
MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (3Q 2019)
6
FINANCING
35
23
1918
17
15 1514 14
13
0
5
10
15
20
25
30
35
40
Y Combinator Accel Partners Andreessen Horowitz Sequoia Capital Joyance PartnersLLC
New EnterpriseAssociates Inc.
Norwest VenturePartners
Bessemer VenturePartners
Kleiner PerkinsCaufield & Byers
Founders Fund LLC
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY METRO REGION (3Q 2019)
7
FINANCING
Metro Region Breakout
Number of Deals
Metro Region Breakout
Amount Raised ($B)
9
13
26
33
34
34
53
74
92
180
404
Orange County
Dallas-Fort Worth
Austin
San Diego
Chicago
Potomac
Seattle
Boston
Los Angeles
New York
San Francisco Bay Area
Number of Deals by Metro Region
$0.17
$0.28
$0.31
$0.53
$0.64
$0.71
$0.86
$1.73
$2.78
$3.61
$11.63
Orange County
Dallas-Fort Worth
Austin
Potomac
Chicago
Seattle
San Diego
Boston
Los Angeles
New York
San Francisco Bay Area
Amount Raised ($B) by Metro Region
V E N T U R E C A P I T A L R E P O R T
NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (3Q 2019)
8
FINANCING
Number of
Deals by
Primary Region
Amount Raised
($B) by Primary
Region
Number of Deals
by Primary Region
265
28
93
93
89
410
65
53
58
137
Mid-Atlantic
Midwest Central
Midwest East
Mountain
New England
Northern California
Pacific Northwest
South Central
South East
Southern California
Amount Raised ($B)
by Primary Region
$4.62
$0.47
$1.25
$1.08
$1.79
$11.73
$0.91
$0.72
$1.04
$3.86
43%
17%
14%
6%
4%
4%4%
3%3%
2% Northern California
Mid-Atlantic
Southern California
New England
Midwest East
Mountain
South East
Pacific Northwest
South Central
Midwest Central
32%
21%11%
7%
7%
7%
5%
4% 4%2%
Northern California
Mid-Atlantic
Southern California
Mountain
Midwest East
New England
Pacific Northwest
South East
South Central
Midwest Central
V E N T U R E C A P I T A L R E P O R T
MEDIAN DEAL SIZE FOR EQUITY FINANCINGS IN U.S. COMPANIES
9
FINANCINGMedian Equity Deal Size ($M)
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Median Equity Deal Size ($M) $4.00 $4.00 $4.10 $5.00 $4.54 $5.00 $5.00 $6.00 $5.25 $6.00 $6.00 $7.70 $7.50
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
V E N T U R E C A P I T A L R E P O R T
Number of Deals
COUNT OF EQUITY FINANCINGS IN U.S. COMPANIES, BY ROUND CLASS
1 0
FINANCING
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Seed 125 133 158 188 183 171 185 208 184 146 107 131 119
First 403 373 376 409 349 316 381 413 343 378 355 398 346
Second 228 205 241 227 241 215 258 238 235 191 226 236 209
Later 440 357 415 379 381 363 449 453 439 434 393 463 333
Restart 4 1 6 3 4 0 2 0 4 0 4 2 1
0
50
100
150
200
250
300
350
400
450
500
V E N T U R E C A P I T A L R E P O R T
Amount Raised ($B)
AMOUNT RAISED IN U.S. COMPANIES, BY ROUND CLASS
1 1
FINANCING
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Seed $0.17 $0.23 $0.29 $0.40 $0.41 $0.41 $0.44 $0.58 $0.40 $0.43 $0.31 $0.36 $0.44
First $3.37 $2.78 $3.74 $3.73 $2.87 $3.74 $4.69 $4.47 $5.26 $5.31 $3.43 $4.90 $3.95
Second $2.68 $2.20 $4.13 $3.43 $3.99 $3.48 $5.20 $3.93 $5.00 $3.22 $7.83 $4.43 $3.44
Later $11.42 $7.32 $9.81 $12.40 $13.84 $12.81 $14.68 $18.07 $17.74 $18.08 $14.17 $20.26 $14.99
Restart $0.55 $0.01 $0.08 $0.08 $0.04 $0.00 $0.03 $0.00 $0.04 $0.00 $0.07 $0.12 $0.02
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
V E N T U R E C A P I T A L R E P O R T
VC FUNDRAISING DIPS SLIGHTLY IN 3Q, BUT REMAINS AT HISTORICALLY HIGH LEVELS
1 2
FUNDRAISING
U.S. VC Fundraising (2016–2019)
Based on multiple closings
VC fundraising declined for the third consecutive quarter,
with 22% fewer fund closings and a 3% dip in the total
amount raised compared to 2Q. Nevertheless, the
amount raised this quarter rests slightly above the
previous 12-quarter average. If current trends continue,
2019 is on track to achieve the third-largest fundraising
totals on record, after 2000 and 2018.
Greenwich, CT-based Oak HC/FT had the top fund
closing of the quarter, with its $800 million final close of
Oak HC/FT Partners III LP.
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Amount Raised ($B) $8.95 $10.41 $8.47 $14.88 $9.90 $6.07 $9.02 $17.14$13.18$17.00$16.16$12.44$12.04
Number of Funds 112 136 155 146 116 130 144 149 154 142 145 161 126
0
20
40
60
80
100
120
140
160
180
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC FUND CLOSINGS IN 3Q 2019
1 3
FUNDRAISING
Firm Name Fund Name Amount
Closed ($M)Location Offering Status Fund Type Closing Type
Oak HC/FTOak HC/FT Partners III
LP$800.00 Greenwich, CT Closed
Multi-Stage
Venture CapitalFinal
DCM Ventures DCM IX LP $762.79 Menlo Park, CA OpenEarly-Stage
Venture CapitalFirst
EW Healthcare PartnersEW Healthcare Partners
Fund 2 LP$746.33 New York, NY Closed
Multi-Stage
Venture CapitalFinal
DCVC Management Co.
LLCDCVC V LP $725.00
San Francisco,
CAClosed
Early-Stage
Venture CapitalFinal
Coatue Management LLCCoatue Venture Capital
Fund I$700.00 New York, NY Closed
Early-Stage
Venture CapitalFinal
V E N T U R E C A P I T A L R E P O R T
EXIT ACTIVITY PULLS BACK IN 3Q AFTER RECORD QUARTER
Just one quarter after the most active period on
record for VC-backed exits, 3Q drifted back down to
earth with the lowest number of liquidity events since
1Q 2016. The number of IPOs was slightly above
the previous 12-quarter average, while the count of
M&As fell 12% below the average.
1 4
LIQUIDITY
Exit Opportunities for U.S. VC–Backed Companies (2016–2019)
0 50 100 150 200 250
3Q'16
4Q'16
1Q'17
2Q'17
3Q'17
4Q'17
1Q'18
2Q'18
3Q'18
4Q'18
1Q'19
2Q'19
3Q'19
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
IPOs 14 10 7 21 7 25 16 30 22 14 10 32 19
M&As 185 176 187 167 186 191 190 192 178 197 175 200 163
V E N T U R E C A P I T A L R E P O R T
M&A MARKET DIPS MODESTLY IN 3Q
The amount paid in M&A deals for VC-backed
companies declined from 2Q, with $26.93 billion
invested in 163 deals. This amount is 9% below the
previous 12-quarter average, indicating a modest
pullback in buyer interest. Although the number of
transactions was the lowest in 4 years, 2019 will be
guaranteed a place in the top 4 for largest annual
amount paid on record.
The largest deal of the quarter was
the buyout of Chicago-based GoHealthInsurance.com
by Centerbridge Partners LP for $1.5 billion.
1 5
LIQUIDITY
U.S. VC-Backed M&A Activity (2016–2019)
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Amount Paid ($B) $36.54 $31.88 $23.77 $19.94 $21.35 $26.78 $30.61 $36.58 $26.93 $36.96 $28.15 $35.09 $26.93
Number of M&As 185 176 187 167 186 191 190 192 178 197 175 200 163
0
20
40
60
80
100
120
140
160
180
200
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC-BACKED M&As IN 3Q 2019
1 6
LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close DateAmount
Paid ($M)Acquirer
GoHealthInsurance
.comChicago, IL
Operator of an online
marketplace for health
insurance coverage.
Shopping
Facilitators
Consumer
Information Services
Consumer
Services8/19/2019 $1,500.00
Centerbridge
Partners LP
SignalFx Inc. San Mateo, CA
Provider of software to
manage and monitor
applications.
Database Software SoftwareInformation
Technology8/21/2019 $1,050.00 Splunk Inc.
Acquia Inc.* Boston, MA
Provider of an open-
source content
management system.
Data Management
Services
Business Support
Services
Business and
Financial Services9/24/2019 $1,000.00
Vista Equity Partners
Management LLC
CTRL-Labs Corp.* New York, NYProvider of a brain-
machine interface (BMI).
Consumer
Electronics
Electronics and
Computer Hardware
Information
Technology9/23/2019 $1,000.00 Facebook Inc.
Semma
Therapeutics Inc.*Cambridge, MA
Developer of stem cell-
based therapeutic
options for the treatment
of Type 1 Diabetes.
Biotechnology
TherapeuticsBiopharmaceuticals Healthcare 9/3/2019 $950.00
Vertex
Pharmaceuticals
*Deal pending regulatory approval
V E N T U R E C A P I T A L R E P O R T
IPO MARKET SETS NEW ANNUAL RECORD, EASILY SURPASSING 2000
The IPO market continued to show great strength in
3Q, despite coming down from the heights of the
previous quarter’s anomalous Uber-driven total. The $6
billion raised at IPO was the 6th largest quarterly
amount on record. Even though the year is not yet
finished, 2019’s total has already smashed the previous
all-time annual record set in 2000 during the first dot-
com bubble.
The top offering of the quarter belonged to Nashville-
based SmileDirectClub LLC, a provider of direct-to-
consumer teeth aligners. Peloton Interactive Inc. had
the highest valuation of any company going public in
3Q, at $9.91 billion.
1 7
LIQUIDITY
U.S. VC-Backed IPO Activity (2016–2019)
3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19
Raised ($B) through IPO $1.07 $0.94 $3.95 $2.35 $0.58 $3.10 $1.75 $4.69 $2.32 $2.40 $3.34 $13.97 $6.00
Number of IPOs 14 10 7 21 7 25 16 30 22 14 10 32 19
0
5
10
15
20
25
30
35
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
V E N T U R E C A P I T A L R E P O R T
TOP U.S. VC-BACKED IPOs IN 3Q 2019
1 8
LIQUIDITY
Company
Name Location
Brief
Description
Industry
Code
Industry
Segment
Industry
Group
Close
Date
Raised
through IPO
($M)
Exchange
SmileDirectClub
LLCNashville, TN
Provider of direct-to-
consumer teeth aligners.
Personal Care
ProductsPersonal Goods Consumer Goods 9/12/2019 $1,346.35
Nasdaq:
SDC
Peloton
Interactive Inc.New York, NY
Provider of interactive
stationary exercise
bicycles.
Sports/Leisure
GoodsPersonal Goods Consumer Goods 9/26/2019 $1,160.00
Nasdaq:
PTON
Datadog Inc. New York, NYProvider of a monitoring
and analytics platform.
Network/Systems
Management
Software
SoftwareInformation
Technology9/19/2019 $648.00
Nasdaq:
DDOG
Cloudflare Inc.San Francisco,
CA
Provider of web security
and performance
solutions.
Network/Systems
Management
Software
SoftwareInformation
Technology9/13/2019 $525.00
NYSE:
NET
10X Genomics
Inc.Pleasanton, CA
Provider of integrated
solutions for RNA and
DNA analysis.
Drug Development
TechnologiesBiopharmaceuticals Healthcare 9/12/2019 $390.00
Nasdaq:
TXG
V E N T U R E C A P I T A L R E P O R T
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, fundraising, 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 institutional equity investments in early stage, innovative companies and do not include companies receiving
funding solely from corporate, individual, and/or government investors. Figures contained throughout the report are current at the time of publication
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.
1 9
V E N T U R E C A P I T A L R E P O R T
ABOUT DOW JONES
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MEDIA CONTACT:
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222.416.2288
constantine.panagiotatos@dowjones.com
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