The DC region was awash in venture capital last year. It kind of snuck up on us because the number of the deals didn't go up much, but the dollar values sure did. What else do the numbers really tell us?
First the numbers:
VCs invested over $1.5B in the region during 2013, over double the $757M invested in 2012. It's the highest annual dollar total for the region since 2001. LiveSafe, whose team we snapped last month, was one of 171 deals counted during the year.
$313M was invested just in Q4, which was over 250% higher than the previous year's Q4 at $116M.
The number of deals in the DC region only inched up slightly from 166 in 2012.
Deal size ranged from $10K in Divvy Cloud to $50M in Cigital. The majority of them were in early stage, followed closely by later stage. (As we learned on Sunday, it's the same thing for women in Hollywood. Much easier to get cast if you're early stage.)
Nationally, VCs invested $29.4B in nearly 4,000 deals during 2013, a 7% increase in dollars and 4% in the number of deals over the prior year.
New Atlantic Ventures managing partner John Backus says the fact that the number of deals went up a tiny bit but dollars doubled suggests that for companies, investing was strong and steady. And at the dollar level, the region is starting to see more later stage companies in the pipeline. Also, because of Dodd-Frank, VCs are keeping companies in their portfolios longer to get better exit prices. John says he expects VC dollars and the number of companies getting funded to continue rising this year. John's Reston, Va.-based firm made two new investments and over 20 follow-ons last year, but he predicts the firm should hit its average of at least five new investments this year.
Hercules Technology Growth Capital managing director Mark Modica (center) says VC deals are up in the region because it's home to some of the hottest industries getting VC checks: data analytics, business intel, healthcare, and cybersecurity. He expects the Internet of Things (the concept that everyday objects like thermostats and refrigerators are connected to the Internet) to pick up steam this year, along with more private equity putting money into DC area tech firms. He also predicts that Silicon Valley- and Boston-based VCs will take even more notice of the region's firms. (Mark was flanked by Deloitte's Chuck Carr and Steve Balistreri at a 1776 event.)
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