Why 2015 Could Be Big for VC
The amount of venture capital raised by companies in the DC region dropped in 2014, but things are looking up for 2015.
Local companies raised $1.1B throughout the year, down from the $1.6B raised in 2013, according to the MoneyTree report released yesterday. The number of deals was up slightly at 196, compared to 184 in 2013. Regionally, Q4 saw 41 deals worth $359M, with Optoro (founders Tobin Moore and Adam Vitarello, above) and Edgeconnex raising the most at $50M each. State funds remained highly active during the quarter with CIT in Virginia and Maryland’s DBED involved in over 10 of the quarter’s transactions.
One of the biggest VC deals of the year was Uber (co-founded by Travis Kalanick, above), raising $1.2B. Nationally, VCs invested $48B in over 4,300 companies during 2014, a 61% increase in dollars and a 4% increase in transactions from 2013. Internet-specific companies raised $12B, marking the highest level of investment since 2000. Maryland ranked 14th nationally for dollars invested and ninth for number of deals in Q4; DC ranked 16th for dollars invested and 24th for number of deals; and Virginia ranked 12th for dollars invested and 14th for number of deals. The MoneyTree report was released by PwC and the National Venture Capital Association.
New Atlantic Ventures managing partner John Backus (above), whose firm invested in five companies last year, says the region is still a healthy market for VC despite the drop in dollars. DC still doesn’t have mega deals like Uber driving (pun intended) up its numbers. Young local companies raising seed and A rounds over the last five to six years will move into B and C rounds this year. So the amount raised in the region could hit $1.5B in 2015, John predicts, with the same number of companies funded as 2014. NAV will be busy on the investing side, as well as the business building side, with its portfolio companies expected to generate $300M in revenue.