state of vc startups tech 2016
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State of Venture, Startups & Tech
@cbinsights
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See what other customers have to say at http://www.cbinsights.com/customer-love
“Designed by a VC insider who truly knows the space and understands end-user needs.”
“We're using CB Insights at Salesforce Ventures to analyze industry trends that are relevant to our strategy. It's helped improve our efficiency.”
Matt GarrattSr. Director, Corporate DevelopmentSalesforce Ventures
“CB Insights provides our team with a holistic and thematic approach that really captures market activity….we've found CBI to have the best access for the most accurate market view.”
“We have been looking for a tool that could give us the ability to track, research and identify investment opportunities. CB Insights provides this simply and in a simple, easy to use interface. The depth of information that we get is exactly what we need. Great product.”
Jonathan TudorVentures DirectorCastrol innoVentures
“CB Insights perfectly illustrates what I expect today from such online services to stay tuned to our fast-changing Tech Landscape. Accurate and up-to-date data mash-ups, intuitive UIs, smart data visualization capabilities and direct API access… all packaged together with straightforward pricing.”
Simon MencarelliSenior Manager, Strategic PlanningDassault Systems
“CB Insights' intuitive user interface, analytical capabilities, and detailed investment information create a very powerful tool for our team's research needs.”
Nate D’AnnaCorporate DevelopmentCisco
Greg BaeInvestments & Biz DevComcast Ventures
Jack LeeneyPortfolio ManagerTelefonica Ventures
4Source: The Economist (cover image), May 12, 2011
We’re in year 6of the tech bubble
5Image source: Affirm Agency
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Are the good times over?
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In 2015 VC-backed companies raised
$128.5Bacross
7872 deals
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2000
Déjà vu all over again?Last time we saw these levels of financing to startups
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Q4’15 SAW SIGNIFICANT DROP IN FUNDING AND DEALS TO VC-BACKED COMPANIES
Quarterly Global Financing Trends to VC-Backed CompaniesQ1’11 – Q4’15
Source: Venture Pulse, Q4'15, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) January 19th, 2016
$12.3 $14.8 $11.6 $10.4 $9.8 $11.5 $12.3 $11.2 $11.5 $11.8 $12.2 $14.7 $17.8 $23.0 $20.9 $27.7 $27.9 $34.8 $38.7 $27.2
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2013 2042 2080 2008
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$-
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Investments ($B) Deals
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Q4 SAW SEED ACTIVITY DECLINE
Source: CB Insights - Uh Oh… US Tech Seed Deal Activity Slips In 2015
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IT ALSO SAW FAR FEWER ‘PRIVATE IPOs’
$100M+ Financings to VC-Backed CompaniesNorthAmerica vs. Asia vs. Europe, Q4’14 – Q4’15
2225
30
39
181816
27 27
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68
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Q4'14 Q1'15 Q2'15 Q3'15 Q4'15
North America Asia Europe
Source: Venture Pulse, Q4'15, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) January 19th, 2016
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AND IT REMAINS WAY EASIER TO RAISE AT A UNICORN VALUATION THAN TO EXIT AT ONE
Source: CB Insights - Unicorn Bottleneck: It’s Way Easier To Raise At A $1B+ Valuation Than Exit For One
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TECH EXITS TRENDED DOWN IN THE FINAL 6 MONTHS OF 2015. IPOs ARE NON-EXISTENT.
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Source: CB Insights 2015 Global Tech Exits Report
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~80% OF TECH EXITS ARE LESS THAN $200 MILLION
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Source: CB Insights 2015 Global Tech Exits Report
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IN 2015, MORE MONEY WENT INTO TECH THAN CAME OUT OF IT
Source: CB Insights - Sound The Alarm: More Money Is Now Going Into Tech Startups Than Coming Out
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PERFORMANCE OF 17 TECH UNICORNS POST-IPO HAS BEEN TERRIBLE
Source: CB Insights data in the JP Morgan “Eye on the Market” roundup of February 17, 2016
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REALITY IS HITTING – THE DREADED DOWN ROUND
Source: CB Insights – Downround Tracker
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NUMBER OF COMPANIES EXITING FOR LESS THAN THEY RAISED HAS INCREASED
Source: CB Insights – Pennies On The Dollar: How Many Startups Sell For Less Than They Raise?
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EVEN PREVIOUSLY ACTIVE INVESTORS ARE SLOWING DOWN THEIR INVESTMENT PACE
Source: CB Insights – Putting On The Brakes: The Most Active VCs Slowed Down Their Investment Pace In 2015
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But all hope is not lost
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STILL 9 NEW UNICORNS BIRTHED SINCE BEGINNING OF THE YEAR (MOST ARE INTERNATIONAL COMPANIES)
Source: CB Insights – Unicorn Tracker
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AND THERE WILL ALWAYS BE GREAT COMPANIES CREATED
Source: Battery Ventures’ Logan Bartlett via this tweet
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LPS ARE STILL BULLISH ON VC AS AN ASSET CLASS
Source: Upfront Ventures
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THERE ARE STILL PLENTY OF INDUSTRIES SEEING INCREASED ACTIVITY – INSURANCE TECH
Source: CB Insights
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FEELING GOOD ABOUT DIGITAL HEALTH
Source: CB Insights
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HIGH ON CANNABIS
Source: CB Insights
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ARTIFICIAL INTELLIGENCE IS GETTING REAL
Source: CB Insights
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AND LOTS OF INCUMBENTS LEFT TO UNBUNDLE. THIS IS AN EXAMPLE OF P&G.
Source: CB Insights - Disrupting Procter & Gamble: The Startups Unbundling P&G and the Consumer Packaged Goods Industry
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HERE’S WELLS FARGO UNDER ATTACK
Source: CB Insights - Disrupting Banking: The FinTechStartups That Are Unbundling Wells Fargo, Citi and Bank of America
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AND HERE’S STARWOOD SUFFERING A DEATH BY A THOUSAND CUTS
Source: CB Insights - Unbundling the Hotel: The 52 Startups Marriott and Hilton Should Be Watching
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SO BUBBLE OR NOT?
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NASDAQ DOWN 10.1% SINCE JULY 2015 PEAK (10% IS A CORRECTION)
32Source: Google Finance
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PUBLIC MARKETS HAVE ALREADY AND WILL CONTINUE TO IMPACT THE PRIVATE MARKETS
Source: Emergence Capital
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BUT Q3 AND Q4 2016 IS D-DAY – THIS IS WHEN THE MOST UNICORNS WILL NEED TO RAISE FUNDING
34Source: CB Insights
