Venture fundraising up, IPOs down in Q4

Venture funds ballooned in the last quarter of 2015 compared with the quarter before, according to a new Dow Jones VentureSource report, even as acquisitions and IPOs slowed.

Firms raised $8.16 billion in the fourth quarter, up nearly 75 percent from the quarter before.

Meanwhile there were 120 mergers and acquisitions that raised a total of $15 billion in the fourth quarter, down four percent from the third quarter, according to the report. Initial public offerings raised $1.3 billion, down 17 percent.

Venture firms also invested less. U.S. companies raised $17 billion in venture funds in the fourth quarter, down 11 percent from the quarter before.

Funding for the entire year was up 24 percent over 2014, according to the report. Last year, 3,916 deals raised $72 billion.

Last week’s Money Tree Report also showed a slowdown in funding during the last three months of 2015, George Avalos reported. He pointed out that financiers may have become wary of “unicorns,” or startups with private valuations of $1 billion or more.

The consumer services sector received the biggest chunk of the fourth quarter’s investments, followed by healthcare, according to the Dow Jones VentureSource report.

Uber had the largest fundraising round at $2.1 billion, followed by Lyft at $1 billion., a New Jersey-based fantasy sports platform, placed a distant third with $350 million. The quarter’s top three U.S. IPOs were Pure Storage at $425 million, Square at $230 million and Edge Therapeutics at $80 million.

New York firms Tiger Global Management and OrbiMed Advisors raised the largest funds in the fourth quarter: $2.5 billion and $950 million, respectively, according to the report. Menlo Park-based Trinity Ventures came in third, raising $400 million.

Illustration from Thinkstock.


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