Approximately 14 months ago, I began tracking the daily funding activity in the 6 counties that make up the Bay area (San Francisco, San Mateo, Santa Clara, Contra Costa, Alameda & Marin). The parameters are simple: Any fundraising round of $10MM or greater reported in that geographic region was captured. I wanted to share some observations from the data for the 12 month period June 2014 – May 2015.
There were 458 deals tracked in that timeframe. It is likely that I missed a few (some stealthy companies and their investors chose to not make their transactions public and it is possible a couple slipped through the cracks of my sophisticated tracking process) but I believe this data is at least 95% accurate.
We have become accustomed to large deals of late and the data bears that out. Of the 458 deals tracked, almost 10% (44) were in excess of $100MM led by the $1.2 billion raised by Uber. Another 15% of the deals tracked (68) were between $50MM and $100MM.
Most people in the Silicon Valley ecosystem will readily admit (though some reluctantly) that the entrepreneurial action and resulting funding activity has moved decidedly north from San Jose and the surrounding communities to the city-San Francisco. But there is still plenty of cash being dropped south of Route 92. While 202 of the deals (44%) were signed by companies calling San Francisco home, including 29 of the $100MM+ variety, there were 126 transactions coming out of the south Bay’s version of the 5 towns-Palo Alto (43), Mountain View (32), Sunnyvale (18), Santa Clara (14) and San Jose (19). Another notable HQ home was Redwood City with 26 deals over $10MM.
The number of deals over $10MM has accelerated over time as well. during the tracking period, the highest number of deals occurred in April (54) and May (51) of 2015. while this is clearly an indication of the market heating up further over time, I think it is also a function of VCs and entrepreneurs trying to sign on the dotted line before the start of the summer vacation season when things usually slow, even in Silicon Valley. The next most active months in order were: March (46), December (43), February (43) and October 2014 (36). May and December were also the clubhouse leaders for total $’s in funding with each logging approximately $3.1 billion in total commitments to pre-IPO companies. Next highest was March with $2.7 billion and February with $2.35 billion. Let’s thank Thanksgiving for November coming in at the bottom in both categories-19 deals raised a total of only $654 million.
So who is writing these big checks. Sequoia Capital participated in the most deals with 41. That was followed closely by Andreesen-Horowitz doing 39 deals and the rest of the top 5 including Khosla Ventures at 34, and Kleiner Perkins and Accel tied for 4th by participating in 32 deals respectively. Remember we are only tracking Bay area funding rounds in excess of $10MM.
It is difficult to do an apples-to-apples comparison of rounds of funding even from 2 years ago with the acceleration of investments these days (seed is the new A round, $20MM A rounds are not uncommon, etc.) but here is a brief breakdown based on reporting on the deals tracked. Even though there is a general feeling that VC funding is in a barbell effect, with most deals happening at the seed/angel stage or at the late-stage/growth rounds, a surprising amount of activity is still occurring in the middle. 35% or 160 of the tracked deals were identified as B rounds while C rounds represented a healthy 86 transactions (19%). There were still 70 deals over $10MM classified as A rounds (very rare only a few years ago) and approximately 48 (11%) were identified as later than a D round.
I hope you found this compilation interesting or at least pulled out some anecdotal items for discussion around the water cooler.
*Special thanks to KPMG intern Misael Cortes for helping to aggregate and decipher the raw data.