Bay Area Reverses Decline in VC Investment in 1Q 2014

Allen Wagner April 01, 2014

The San Francisco Bay Area reversed a three-quarter decline in venture capital financings, as VC firms poured $5.0 billion across 321 deals in 1Q 2014, both increases over 4Q 2013’s figures, early quarter-endPitchBook data show.

The number of VC deals had dropped dramatically from a recent high of 392 in 2Q 2013 to 305 in 4Q 2013, but a resurgence in Bay Area software investing (152 rounds totaling $3.3 billion in 1Q), led by mega-financings for Cloudera, Palantir Technologies and Dropbox, helped increase overall deal flow in the region. The $3.3 billion raised by Bay Area software companies in 1Q 2014 is the biggest quarterly total ever.

Larger deals also pushed the overall median pre-money valuation for VC-backed companies in the Bay Area to $33.8 million in 1Q 2014, the fourth straight quarter with growth in valuations.

To view more on the Bay Area and other regions (New York City, Pacific Northwest and Europe), check out the datagraphics at the bottom of this article.

Meanwhile, in New York, VC deal-making activity declined for the second straight quarter, from 131 financings in 3Q 2013 to 99 in the first quarter this year. Still, capital invested in the Big Apple remained steady from quarter to quarter and stood at $1.1 billion in 1Q 2014; and similarly to the Bay Area, the median valuation for New York-based VC-backed companies increased for the third quarter in a row to $19.3 million.

Retail, which tends to be a stronger industry in the New York City area, experienced a lackluster quarter. VC firms invested $300 million across 27 rounds for New York-based retail companies in 2013, but the first quarter of 2014 saw just $2.5 million invested across three deals.

Looking at Europe, it’s hard not to notice the incredible decline in VC deal-making since early 2013. The 252 completed financings in 1Q 2014 is the fewest since 3Q 2010, but capital invested stayed steady from 4Q 2013 at €1.39 billion. This was made possible due to an influx of larger deals in Central & Eastern Europe, which made up for a significant reduction in capital invested in France & Benelux.

Interested in PitchBook’s venture capital data? Read more articles here or email to learn more about the PitchBook Platform.

Click to view the Bay Area datagraphic. | By Jennifer Sam

Click to view the Bay Area datagraphic. | By Jennifer Sam

Click to view the NewYork datagraphic. | By Jennifer Sam

Click to view the New York datagraphic. | By Jennifer Sam

Click to view the Pacific Northwest datagraphic. | By Jennifer Sam

Click to view the Pacific Northwest datagraphic. | By Jennifer Sam

20140401 - PitchBook - Europe 1Q 2014 VC Datagraphic

Click to view the Europe datagraphic. | By Jennifer Sam

Featured image courtesy of Aslak Raanes, Wikimedia Commons.

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