PitchBook December 18, 2013
To review the year that was in private equity and venture capital, PitchBook is closing out 2013 with a two-week series of articles examining the trends, stories and data that will be remembered by the industry for years to come. From Twitter’s IPO and surging stock markets to the Dell and Heinz deals, PitchBook tracked it all this year. And now we’re putting it all back in focus with our 2013 in Review series.
This article examines the largest venture capital financings of the year and what made them attractive investments in the first place.
Even companies that round out this list of the largest venture capital financings this year (through Dec. 17) scored some serious VC cash, as both photo-sharing pinboard Pinterest and property rental marketplace Airbnb raised $200 million apiece.
Pinterest’s $200 million Series D in February, led by Valiant Capital Partners, valued the company at at an impressive $2.6 billion. The funding is reportedly being used for standard growth-oriented initiatives (hiring, product development, taking over the world, etc.), but what the $200 million arguably fuels, from an external perspective, is the awareness that the company is rapidly expanding and truly becoming a household name. In fact, the social site has grown so fast in 2013, that you’ll see its name again in about one minute as you continue reading this list.
Peer-to-peer marketplaces, from ridesharing to babysitting, are becoming increasingly popular within the VC realm; Airbnb’s property rental marketplace is one example, and among the first, of this trend. The company has come under legal fire from New York officials in recent months, as opinions have surfaced about what constitutes a legal rental of occupied apartments and what regulations should be applied to hotel-like services. Legal matters aside, important as they are, Airbnb and its community of homeowners and renters are forging ahead with their $200 million Series C investment in hand. The October deal, led by Founders Fund, valued the company at an estimated $2.6 billion.
3. (tie) Pinterest – $225 million (Fidelity Investments, Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital, Valiant Capital Partners) and AirWatch – $225 million (Insight Venture Partners, Accel Partners)
Pinterest’s valuation jumped to a stunning $4 billion in October with a $225 million Series E injection led by Fidelity Investments. The latest round of funding came just eight months after Pinterest’s Series D round, in a sign the company is expanding fast. While it’s no surprise that the social networking site is securing so much capital and, in turn, reaping a soaring valuation (remember Twitter’s valuation history?), the massive amount of equity being poured into Pinterest does have us asking, could the stylish online pinboard be the next social media IPO?
Device security startup AirWatch may not be as flashy or appetizing as curated photo boards, but the company’s $225 million first financing in May was one of the largest Series A rounds ever raised. The funding, led by Insight Venture Partners with $25 million from Accel Partners, proves AirWatch is growing in the enterprise mobility management marketplace.
2. Uber Technologies – $258 million (Google Ventures, TPG Capital)
Remember when I said peer-to-peer marketplaces are becoming increasingly popular? While Uber isn’t exactly a peer-to-peer service like Sidecar or Lyft, it falls under the general ridesharing umbrella because it challenges the rules that apply to traditional taxis and on-demand car services (not unlike regulations that apply to hotels. “Ahem,” Airbnb) and typically attracts the same pool of customers. Uber raised its largest deal yet in August, with $258 million in Series C funding led by Google Ventures—more than five times the company’s previous $48.8 million Series B in February 2012. The latest financing, which values Uber at $3.7 billion, was also Google Ventures’ biggest deal of 2013.
1. GENBAND – $343.5 million (One Equity Partners, Sevin Rosen Partners, Venrock)
In addition to receiving massive amounts of funding, all of the companies in this list, so far, share another noteworthy commonality: they all have a mobile-centric element. With this recognition, GENBAND’s colossal $343.5 million round of funding (the largest VC deal in 2013) makes sense—mobile apps need mobile networks, and GENBAND delivers IP-multimedia app software for fixed-wire lines, and mobile and cable network service providers.
Be sure to return to the PitchBook Blog or read the PitchBook Newsletter in the coming days for additional 2013 in Review content.