Uber and Flipboard Help VC Deal Activity Hit $7.2 Billion Last Quarter
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While some sectors didn't feel the VC love this past quarter, the startup community as a whole did.
Venture capital activity for the third quarter of 2013 hit its highest peak in more than 12 years with 857 deals completed and $7.2 billion in funding, according to a report by CB Insights, an investment database company.
A major success was in mobile, an industry that had a record-breaking quarter with $1.1 billion poured into it. This milestone was the first time mobile has ever crossed the $1 billion mark. This achievement is in part thanks to transportation startup Uber's massive round of financing in August (a reported $361 million), satellite company Kymeta's $50 million Series C round and mobile-first magazine Flipboard's $50 million in funding. And while mobile-game startups like Candy Crush are garnering media attention as it prepares for its IPO, VCs were hesitant to fork over cash to this segment, with only two percent of funding in the mobile sector going to games.
Besides the large amount of deals completed in the third quarter, VC-backed companies continued to see success this period with exits. There were 23 VC-backed companies that had an IPO (total valuation $11.8 billion) and 112 M&As, equating to 135 exits. The M&A figure was an increase from first and second quarter deals, which had 103 and 105 exits respectively. The IPO valuation represented the "highest aggregate value" of exits in the last five quarters.
With all this good news, you would think it was all rosy in the world of startups. It's not. While there has been a lot of hype about the healthcare industry, the third quarter saw deal activity and funding decline 27 percent and 36 percent respectively. Also, investors seem to be jumping the clean-tech ship. In the first quarter of 2010, funding for the sector hit $1.3 billion. This past quarter it only managed to snag $321 million across 33 deals.
Keep in mind the report only took into account US companies backed by VC funds. Private equity or mutual funds were not included.