State of vc startups tech 2016
Transcript of State of vc startups tech 2016
1
State of Venture, Startups & Tech
@cbinsights
2
Big decisions need more than Google searches and gut instinctWe modernize and automate how organizations see tomorrow’s opportunities, today
About CB Insights
Backed by the National Science Foundation, CB Insights creates beautifully simple software using machine learning, predictive analytics & data visualization to help the world’s best companies see tomorrow’s opportunities, today.
To make your life easier, visit http://www.cbinsights.com
The CB Insights data platform uses unstructured data and machine learning to help you see:
The next market you should expand intoYour next M&A targetYour next investmentYour competitor’s strategyTomorrows’ disruptive threatsThe S&P 500 of tomorrowYour next client
3
The industry’s most trusted (and loved) data
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
6
Are the good times over?
7
In 2015 VC-backed companies raised
$128.5Bacross
7872 deals
8
2000
Déjà vu all over again?Last time we saw these levels of financing to startups
9
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
13691505
13771283
1511
1696
1526
1709 1737 17861873 1863
19582029 2089
2013 2042 2080 2008
1742
0
500
1000
1500
2000
2500
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
Investments ($B) Deals
10
Q4 SAW SEED ACTIVITY DECLINE
Source: CB Insights - Uh Oh… US Tech Seed Deal Activity Slips In 2015
11
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
16
1
68
64
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
12
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
13
TECH EXITS TRENDED DOWN IN THE FINAL 6 MONTHS OF 2015. IPOs ARE NON-EXISTENT.
13
Source: CB Insights 2015 Global Tech Exits Report
14
~80% OF TECH EXITS ARE LESS THAN $200 MILLION
14
Source: CB Insights 2015 Global Tech Exits Report
15
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
16
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
17
REALITY IS HITTING – THE DREADED DOWN ROUND
Source: CB Insights – Downround Tracker
18
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?
19
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
20
But all hope is not lost
21
STILL 9 NEW UNICORNS BIRTHED SINCE BEGINNING OF THE YEAR (MOST ARE INTERNATIONAL COMPANIES)
Source: CB Insights – Unicorn Tracker
22
AND THERE WILL ALWAYS BE GREAT COMPANIES CREATED
Source: Battery Ventures’ Logan Bartlett via this tweet
23
LPS ARE STILL BULLISH ON VC AS AN ASSET CLASS
Source: Upfront Ventures
24
THERE ARE STILL PLENTY OF INDUSTRIES SEEING INCREASED ACTIVITY – INSURANCE TECH
Source: CB Insights
25
FEELING GOOD ABOUT DIGITAL HEALTH
Source: CB Insights
26
HIGH ON CANNABIS
Source: CB Insights
27
ARTIFICIAL INTELLIGENCE IS GETTING REAL
Source: CB Insights
28
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
29
HERE’S WELLS FARGO UNDER ATTACK
Source: CB Insights - Disrupting Banking: The FinTechStartups That Are Unbundling Wells Fargo, Citi and Bank of America
30
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
31
SO BUBBLE OR NOT?
32
NASDAQ DOWN 10.1% SINCE JULY 2015 PEAK (10% IS A CORRECTION)
32Source: Google Finance
3333
PUBLIC MARKETS HAVE ALREADY AND WILL CONTINUE TO IMPACT THE PRIVATE MARKETS
Source: Emergence Capital
34
BUT Q3 AND Q4 2016 IS D-DAY – THIS IS WHEN THE MOST UNICORNS WILL NEED TO RAISE FUNDING
34Source: CB Insights