Aggregate Venture Capital Deal Value Hits Record High in 2015

18.01.2016 10:20

Preqin, the alternative assets industry’s leading source of data and intelligence, has reported a significant increase in the global venture capital investments in 2015. Globally, there were 9,202 venture capital financings in 2015, worth a combined $135.8bn.This represents a 6% drop from the 9,811 deals in 2014, but a 45% increase on the $93.5bn aggregate value recorded last year.

2015 saw the aggregate value of venture capital deals increase for the third successive year to stand at $135.8bn, up from $93.5bn in 2014 and more than double the $57.1bn in 2013. Although the 9,202 deals recorded in the year is similar to both 2013 and 2014 (9,785 and 9,811 respectively), average deal size is up to $18.4mn in 2015 from $12.4mn in 2014. Asia, in particular, has seen a significant uptick in venture capital deal activity, as Greater China recorded 1,605 deals, more than in Europe (1,373), while India recorded 927 deals, almost twice the number seen in 2014 (512).

Average investment size has risen
Most venture capital deals occur earlier on in the lifecycle of a company, with 33% of deals completed at angel or seed stage and a further 26% at Series A. Moreover, the average size of financing rounds has risen substantially over 2015. Series A financings rose 34% from $7.9mn in 2014 to $10.6mn this year, while the average venture debt financing increased from $9.6mn to $32.7mn. Investments made in Series D and beyond are now worth an average of $94.0mn. Likewise, the July financing of Didi Kuaidi was the largest venture capital deal of 2015 at $2bn. Of the 10 biggest deals of the year, five were in Asia, and five were in the US, with none taking place in Europe.

Despite the overall healthy deals environment, significant gains in Asia were balanced by declining deal numbers elsewhere. Europe recorded 1,373 deals, its second annual decline from a peak of 2,002 in 2013, and the lowest number of deals recorded in the region since 2010. Similarly, although aggregate deal value in North America increased, the number of deals in the region fell 23%, from 5,587 in 2014 to 4,307 in 2015. While Preqin expects these totals to rise as new data becomes available, 2015 activity does not look likely to match the levels seen in previous years.

Number of Venture Capital Deals by Region, 2008 - 2015

Source: Preqin

Less Exits
Overall venture capital exit activity declined in 2015 for the first time since 2008. The number of exits decreased from 1,138 in 2014 to 1,052 in 2015, while the total exit value declined 41%, from $125.1bn to $73.3bn.Seven hundred and thirty nine of the exits in 2015 were achieved through a trade sale, over two-thirds of total global exits. The number of IPOs and follow-ons decreased from 248 in 2014 to 215 in 2015. Irish internet company achieved the largest exit in 2015, generating $5.9bn through its sale to Activision Blizzard, Inc. Five of the top ten exits were in the US, and a further two in China.

“It was another strong year of financing in the venture capital industry. Asia once again developed strongly throughout the year, and achieved a notable milestone with Greater China recording more deals in a year than Europe for the first time ever. While North America, especially California, continues to dominate the venture capital industry, Asia is beginning to occupy an ever-larger share of the market. Exit activity has been stifled through the year, with both the number and total value of exits decreasing from the levels seen in 2014. A tricky IPO market has made managers and investors wary, but there is still a lot of value being generated through exits from portfolio companies.” Felice Egidio, Head of Venture Capital Products, Preqin.

About Preqin
Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. Preqin has built a reputation in the alternative assets industry for providing the most comprehensive and extensive information possible. Leading alternative assets professionals from around the world rely on Preqin’s services daily, and its data and statistics are regularly quoted by the financial press.

(Press release)


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