A total of $1.4 billion was invested into D.C.-area technology companies in 2015 through 169 individual deals, according to a new report provided to DC Inno by PricewaterhouseCoopers (PwC) in partnership with the National Venture Capital Association (NVCA). Interestingly, regional software development companies and biotech firms attracted the most interest from investors during 2015—pulling in $724 million and $261 million, respectively.
For reference, the report only accounts for transactions made between companies and institutional investors. The PwC/NVCA report does not contain information related to angel investor activity nor funding prior to an official seed raise.
The data, compiled by Thompson Reuters, shows that the majority of funding in Q4 2015, about $500 million, was pushed into later stage, mature companies — like rising cybersecurity brands Tenable Network Security and former NSA director Keith Alexander's IronNet Cybersecurity, both of whom raised large rounds in Q4.
The aforementioned cybersecurity industry dominated the local investment landscape in the fourth quarter, totaling nearly $400 million of the $550 million invested by VCs in the latter part of the year, locally, according to the report.
And while mature stage D.C.-area tech companies led the pack in terms of scooping the largest amount of cash from investors, the most deals actually came via early stage (also known as startups) stage companies with 84 investment made by VCs over the course of 2015. That mark of 84 is also double that of expansion stage and late stage ventures, separately.
Importantly, the D.C.-area has seen an increase in funding for promising startups over the last several years, especially since 2010, the PwC/NVCA MoneyTree report shows. For example, in 2009 and 2010, just 39 and then 46 early stage companies received cash from venture capitalist. This shift in investment dollars has effectively enabled an increasing number of entrepreneurs — some who may have never started a business before — to pursue their business ideas.
Interestingly, the fourth quarter of 2015, between October and December, was the most active quarter for VCs pumping money into D.C.-area companies in 2015. The least active investment period for 2015 occurred in the second quarter, with just $245 million going to local companies between April and June so that they could accelerate growth.
