NYC-based CB Insights, a venture capital and angel investment database backed by the National Science Foundation, has released their Q1 2015 U.S. Venture Capital Report. The report tracked a number of mega-deals this quarter whose investors included hedge funds and/or mutual funds. This report only includes U.S.-based rounds in which VCs directly participated. Among the report's major findings which are pertinent to the DMV area: total VC deals in California continue to decrease and healthcare sector related deals continue to move away from major tech hubs, towards other markets.
Indeed, for the first time since 2013, California and Massachusetts took less than 50 percent of healthcare deals — otherwise known as investment rounds closed via venture capital. States outside of the major tech centers took nearly 44 percent of healthcare deals.
2015 Q1 VC Dollars Invested by Company Type | Create infographics
In D.C. itself, VCs invested $43.6 million in three major healthcare sector related deals. Nationally, the most healthcare deals actually came from Missouri, North Carolina, Pennsylvania, and Tennessee, while the DMV remained a strong source of sector-specific healthcare investment.
In total, there were seven 2015 Q1 VC deals from the telecomm, Internet, and healthcare industries, for D.C. In addition, the Q1 VC dollars invested within these three sectors summed $65.5 million in D.C.
2015 Q1 VC Deals by Company Type in Washington, DC | Create infographics
Elsewhere, California saw its third straight quarter of decreased deal activity, dropping to its lowest point since Q1 of 2012. The dollar amount of said deals also decreased by 17 percent in the absence of any $1 billion or greater financial rounds.
When reviewing the entirety of Q1 2015, nationally, CB Insights found that VC deals hit a nine-quarter low, falling for the fourth straight quarter, with an 18 percent YoY decrease. That being said, when investments from hedge funds, mutual funds and private equity investors are included, the final statistic can be illustrated differently — in this case, VC-backed companies actually raised $17.7 billion during Q1.
Washington, D.C.-based venture capital firm NEA topped the list of "most-active" investors followed by Andreessen Horowitz and First Round Capital. In general, while funding and deal flow continued to stay strong, exit activity, especially IPOs, occurred very rarely, according to the report. The implication is, of course, that raising money at a billion dollar valuation is easier than exiting at a billion dollars.
