Venture Capital Deal Value Hit Record $136 Billion in 2015

North America continues to lead, with Asia grabbing more market share

The aggregate value of venture capital deals globally in 2015 increased for the third consecutive year to $136 billion across 9,202 financings, according to Preqin, the alternatives data provider.

This represented a 6% drop from the 9,811 deals concluded in 2014, but a 45% increase on the $94 billion aggregate value recorded that year.

The average deal size rose to $18 million in 2015 from $12 million in 2014.

According to Preqin, most venture capital deals occur earlier in a company’s lifecycle, with 33% completed at the angel or seed stage and 26% at Series A.

Deal activity was particularly robust in Asia last year, with China recording 1,605 deals and India 927, nearly twice as many as in 2014.

In contrast, 1,373 deals were completed in Europe, down from a high of 2,002 in 2013 and the lowest number recorded there since 2010.

In North America, the number of deals in 2015 fell by 23% from the previous year to 4,307. California led U.S. venture capital deals, grabbing 41% of them.

Preqin noted that new data would likely raise these totals, but that they would still lag levels seen in previous years.

The average size of financing rounds rose substantially over 2015. Series A financings increased by 34% from $7.9 million in 2014 to $10.6 million in 2015, while the average venture debt financing increased from $9.6 million to $32.7 million.

Investments made in Series D and beyond now average $94 million.

The 10 biggest deals of 2015 were split evenly between the U.S. and Asia, with none taking place in Europe:

  • Didi Kuaidi (China), telecoms: $2 billion, July
  • Airbnb (U.S.), internet: $1.5 billion, June
  • Ele.me (China), internet: $1.3 billion, December
  • Coupang (South Korea), internet: $1 billion, June
  • Didi Kuaidi (China) telecoms: $1 billion, September
  • Social Finance (U.S.), financial services: $1 billion, September
  • SpaceX (U.S.), aerospace: $1 billion, January
  • Uber Technologies (U.S.), telecoms: $1 billion, February
  • Uber Technologies (U.S.), telecoms: $1 billion, July
  • 17u (China), internet: $920 million, July

“It was another strong year of financing in the venture capital industry,” Felice Egidio, Preqin’s head of venture capital products, said in a statement. “While North America, especially California, continues to dominate the venture capital industry, Asia is beginning to occupy an ever-larger share of the market.

Preqin said overall venture capital exit activity declined in 2015 for the first time since 2008, dropping to 1,052 from 1,138 in 2014. Total exit value fell by 41%, from $125 billion to $73 billion.

According to the report, 739 exits in 2015 occurred through a trade sale, more than two-thirds of total global exits. The number of IPOs and follow-ons decreased from 248 in 2014 to 215 in 2015.

The Irish Internet company King.com achieved the biggest exit in 2015, generating $5.9 billion through its sale to Activision Blizzard.

Six of the top 10 exits, all of which were trade sales, took place in the U.S.: HomeAway sold to Expedia for $3.9 billion; Auspex Pharmaceuticals to Teva Pharmaceuticals for $3.5 billion; Lynda.com to LinkedIn for $1.5 billion; Flexus Biosciences to Bristol-Myers Squibb for $1.3 billion; Virtustream to EMC for $1.2 billion; and Hyperion Therapeutics to Horizon Pharma for $1.1 billion.

A further two exits occurred in China and one in Russia.

“Exit activity has been stifled through the year, with both the number and total value of exits decreasing from the levels seen in 2014,” Egidio said.

“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.”

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