Financing Trends Q2 2014 (United States)

Q2 continued the trend of massive funding activity with corporate

venture participation. Compared to the same quarter last year, CVC
funding in Q2 2014 more than doubled as CVC balance sheets are
helping in late stage mega-financings.

Behind multiple $50M+ deals, average deal size with corporate

venture participation reached $23M, falling off Q1s five-quarter
high of $24.2M but marking the second straight quarter with a
$20M+ average.

Corporations making strategic investments in companies but not

as part of a specific separately demarcated venture group are not
included. Page 47 details the rules and definitions we use.

Google Ventures led all corporate VCs, investing in over twice as

many U.S. venture deals as the second most-active corporate VC,
Intel Capital, in Q2 2014.

California took 66% of all CVC funding dollars invested across the
country on the back of mega-financings to Bay Area-based
companies from corporate investors. Both Mass and NY bounced
back after funding share fell drastically in Q114.
After a multi-year high in Q1 for CVC activity, corporate VC
participation reached new highs as 92 corporate VCs completed an
investment in Q2, a 39% rise from the same quarter last year and a
51% jump from the same quarter two years ago Q2 2012.

Corporate venture activity accounted for 29% of the $13.9B total

venture capital funding in Q2. CVCs participated in 19% of all VC
deals, a five-quarter high.

Internet CVC deal activity rebounded from a slow Q1, rising to 76

deals, a growth of 62%.

Healthcare CVC funding jumped to a five-quarter high, increasing

over 200% on a sequential basis. CVC deals in the healthcare
sector also peaked at 40 deals, up 74% from Q114.

Corporate VCs continued to invest in the broader VC market in Q2 as CVC funding hit a ninequarter high and jumped nearly 34% on a sequential basis, while deals increased 45%.
Compared to the same quarter last year, CVC funding more than doubled.

June saw corporate VCs participate in the highest monthly funding total invested in the last
two years driven by Google Ventures participation in Ubers $1.2B mega-deal. April saw the
highest number of monthly CVC deals since 2013 with over 70 in total.

Massachusetts CVC deal share reclaimed the #2 spot from New York after a 9% deal share in
Q114. California has taken 50%+ of all U.S. corporate venture capital deals in three of the
past five quarters.

California took 66% of all CVC funding dollars invested across the country on the back of
mega-financings to Bay Area-based companies from corporate investors. Massachusetts saw
modest growth after funding share fell drastically in Q114.

Early-stage activity (Seed/Series A) regained share in Q2 as deal share grew back to 43%
cumulatively. Late-stage (Series D/Series E+) deal share hit a five-quarter low at 20% after a
high of 26% in Q114.

Ubers $1.2B Series D largely contributed to the dominance of late-stage funding share, with
Series D investments accounting for 43% of funding share in Q214.

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Corporate venture capital deal activity share to the internet sector reached a five-quarter high
at 41%, while mobile fell to a five-quarter low at 14%. Healthcare CVC deal share rose for
the third straight quarter to take over 1/5th of all CVC deals in Q214.

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While CVC deal share to the mobile sector may have fallen, funding share saw a significant
jump to hit a five-quarter high at 35%.

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Behind multiple $50M+ deals, average deal size with corporate venture participation reached
$23M, falling slightly from Q1s five-quarter high of $24.2M, but marking the second straight
quarter with a $20M+ average deal size.

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Corporate venture activity accounted for 29% of the $13.9B total venture capital funding in
Q2. CVCs participated in 19% of all VC deals, a five-quarter high.

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Corporate VC participation hit a multi-year high as 92 corporate VCs completed an

investment in Q2, a 39% rise from the same quarter last year and a 51% jump from the same
quarter two years ago.

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Google Ventures led all corporate VCs, investing in over twice as many deals as second place
Intel Capital in Q214.
Rank Investor

Sector of Highest Investment Volume

Google Ventures

Internet

Intel Capital

Internet

Qualcomm Ventures

Mobile & Telecommunications; Internet

SR One

Healthcare

Salesforce

Internet

Bloomberg Beta

Internet

Samsung Ventures

Electronics

Novartis Venture Funds

Healthcare

Siemens Venture Capital

Energy & Utilities

CAA Ventures

Internet

Comcast Ventures

Internet

Johnson & Johnson Dev Corp

Healthcare

13

GE Ventures

Internet

13

Cisco Investments

Internet
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CVC funding to internet companies in Q2 fell 33% on a sequential basis, but internet CVC
deal activity made a notable jump from Q114 levels, rising from 47 deals to 76 deals.

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San Francisco topped the list of U.S. cities for Internet corporate venture capital deals.
Google and Salesforce each participated in two of the top five Internet CVC deals in Q214.

Top Internet Deals: Q2 2014

Top Cities for Internet: Q2 2014

Company

Round

Amount ($M)

Top Cities

Deals

Dollars ($M)

Flatiron Health

Series B

$130

San Francisco

19

$349

InsideSales.com

Series C

$100

New York

11

$283

Anaplan

Series D

$100

Mountain View

$8

MapR Technologies

Series D

$80

Sunnyvale

$16

Wish

Series B

$50

Atlanta

$4

Note: Venture capital deals included in the ranking may be tranched fundings.

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Despite a second straight quarter of decline, California still accounted for over 50% of
corporate VC Internet deals. Interestingly, non-major markets including Utah accounted for
28% of Internet CVC share.

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California saw over $550M invested in the Internet sector in Q2 by corporate VCs, as its share
of Internet funding fell from a high of 86% in Q1. New York jumped from 5% in Q1 to 26% in
Q2 behind Flatiron Healths $130M Series B led by Google Ventures.

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Mid-stage financings (Series B/C) hit a five-quarter high as Series C deals grew from 11% to
15% on a sequential basis. A number of early-stage Internet companies (Seed Series A)
pushed the share of deals from 40% in Q114 to 50% in Q2.

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Corporate VC funding share to the Internet sector largely went to Series B/Series C rounds,
which accounted for 62% of all Internet funding dollars in Q214. Overall funding share across
stages returned to 2013 ranges after Clouderas $900M Series F skewed Q114 figures.

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Ubers $1.2B round of financing buoyed mobile as funding peaked to a five-quarter high of
nearly $1.4B. Despite increased deals, removing Ubers round would mark a five-quarter low
in the mobile sector.

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San Francisco leads the list of U.S. cities for Mobile & Telecom corporate venture capital
deals. Top mobile CVC deals spread across marketing from mobile app development, gaming
and deep-linking.

Top Mobile Deals: Q2 2014

Top Cities for Mobile: Q2 2014

Company

Round

Amount ($M)

Top Cities

Deals

Dollars ($M)

Uber

Series D

$1,200

San Francisco

10

$1,268

Kony

Series E

$50

Austin

$7

Crittercism

Series C

$30

Orlando

$50

Orbotix

Series E

$16

Boulder

$16

URX

Series A

$12

Concord

$10

Glympse

Series C

$12

Note: Venture capital deals included in the ranking may be tranched fundings.

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Californias share of corporate venture deals to the mobile sector fell drastically off its Q1 fivequarter high to 52% in Q2. NY mobile CVC deal share dropped to a low as well at just 4%.

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Californias share of mobile CVC dollars rose from 82% in Q114 to a whopping 91% in
Q214. However, excluding Ubers $1.2B financing, Californias share drops to a three-quarter
low of 60%.

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42% of Mobile CVC deals came at the Seed stage in Q214, a five-quarter high. After taking
28% of all Mobile CVC deals in Q114, Mobile Series B deal share fell to just 8%.
Cumulatively, late-stage (Series D+) hit a five-quarter high in deal share at 19%.

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As in Q114, mega-deals at the Series D stage changed the complexion of the CVC funding
distribution quite drastically. In Q214, Series D jumped to a whopping 86% of aggregate
CVC mobile funding.

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Healthcare CVC funding jumped to a five-quarter high, increasing over 200% on a sequential
basis. CVC deals in the healthcare sector also peaked at 40 deals, up 74% from Q114.

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Aduro Biotech and Coherus BioSciences $55M Series C financings were the largest
healthcare CVC financings of the quarter, while Cambridge led all cities in deals in Q2.

Top Healthcare Deals: Q2 2014

Company

Round

Aduro BioTech

Series C

Coherus BioSciences

Amount ($M)

Top Cities for Healthcare: Q2 2014

Top Cities

Deals

Dollars ($M)

$55

Cambridge

$115

Series C

$55

South San Francisco

$118

Principia BioPharma

Series B

$50

San Diego

$70

Otonomy

Series D

$49

Ann Arbor

$24

Panoptica

Series B

$45

Note: Venture capital deals included in the ranking may be tranched fundings.

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After Massachusetts took just 9% of all healthcare CVC deals in Q1 2014, the Bay State
bounced back with 25% deal share in Q214. California held its lead with a 45% deal share.

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California took 50% of all CVC healthcare funding in Q214, down from a 78% share in Q114
which was driven by a steep drop off for MA-based healthcare funding. Massachusetts
rebounded in Q214, garnering 18% of healthcare CVC dollars

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Series D healthcare CVC deal share increased from 5% to a five-quarter high of 21% in Q214
while early-stage and mid-stage deal share remained largely range-bound versus Q114.

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Despite a five-quarter high for Series D funding share, late-stage (Series D+) share fell to a
five-quarter low of 31%. Mid-stage funding share (Series B/Series C) expanded to 45%, as
Series A funding share fell for the second straight quarter.

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California corporate VC deals jumped 31% on a sequential basis and 59% from the same
quarter a year ago. CVC funding participation in California-based companies topped $2B for
the second straight quarter.

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The Greater Bay Area dominated the top 5 California cities in terms of CVC deals and dollars.
While tech took the top 3 California CVC deals, green tech and healthcare took the next.

Top Deals in California: Q2 2014

Top Cities in California: Q2 2014

Company

Round

Amount ($M)

Top Cities

Deals

Dollars ($M)

Uber

Series D

$1,200

San Francisco

33

$1,697

Anaplan

Series D

$100

Sunnyvale

10

$82

MapR Technologies

Series D

$80

Santa Clara

$87

Growth Equity

$70

Menlo Park

$26

Aduro BioTech

Series C

$55

South San Francisco

$118

Coherus BioSciences

Series C

$55

Mountain View

$12

Sungevity

Notes:
- Venture capital deals included in the ranking may be tranched fundings.
- MapR Technologies raised an additional $30M in debt financing alongside their $80M equity financing.

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After hitting a quarterly funding low in Q114, Massachusetts saw CVC funding participation
increase 126% on a sequential basis, while deal activity reached a five-quarter high on 83%
deal growth.

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Cambridge led all cities for deals, while healthcare dominated the top Mass. CVC deals
including GE Ventures-backed Chrono Therapeutics $32M Series A and Fidelity-backed
Dimension Therapeutics $30M Series B.

Top Deals in Massachusetts: Q2 2014

Company

Round

Chrono Therapeutics

Series A

Dimension Therapeutics

Amount ($M)

Top Cities in Massachusetts: Q2 2014

Top Cities

Deals

Dollars ($M)

$32

Cambridge

11

$137

Series B

$30

Waltham

$37

Navitor Pharmaceuticals

Series A

$24

Boston

$11

Daktari Diagnostics

Series C

$20

Tamr

Series A

$16

Note: Venture capital deals included in the ranking may be tranched fundings.

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Corporate venture funding in NY grew 58% on a sequential basis behind Flatiron Healths
$130M financing, while deal levels increased modestly by 1 deal.

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Google Ventures participation in Flatiron Healths $130M Series B marked the largest NY
based CVC financing round in Q214, while Intel Capital-backed Sprinklr and Citi Venturesbacked Betterment rounded out the top 3.

Top Deals in New York: Q2 2014

Company

Round

Amount ($M)

Flatiron Health

Series B

$130

Sprinklr

Series D

$40

Betterment

Series C

$32

LearnVest

Series C

$27

Ioxus

Series C

$21

Chase Pharmaceuticals

Series B

$21

Note: Venture capital deals included in the ranking may be tranched fundings.

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Measuring corporate venture activity is important. We encourage you to review the methodology and
definitions employed by us to better understand the numbers presented in this report. If you have any
questions about our definitions or methodological principles, please reach out to us directly.

What is included?

Equity financings into emerging companies. Funding must come from

corporate venture groups.

Fundings of only private companies. Public companies of any kind on any

exchange (including Pink Sheets) are excluded from our numbers even if they
received investment by a venture firm(s)
Companies must be headquartered in the USA. Our geographic data is
based on the city and state where the company receiving investment is
headquartered. If a company has a satellite office/presence in multiple cities or
was founded in a particular city but has moved its HQ, our results reflect only
this HQ address.
Only include the investment made in the quarter for tranched
investments. If a company does a second closing of its Series B round for
$5M and previously had closed $2M in a prior quarter, only the $5M is
reflected in our results.
Round #s reflect what has closed not what is intended. If a company
indicates the closing of $5M out of a desired raise of $15M, our numbers
reflect only the amount which has closed.
Only verifiable fundings are included. Fundings are verified via (1) various
federal & state regulatory filings (2) direct confirmation with firm or investor, or
(3) press release.
Funding close date matters. Fundings are provided based on funding close
date and not on announcement date.

What is not?
Strategic corporate investments. Corporations making strategic investments in
companies but not as part of a specific organized venture group are not included.

Angel investment. These are not included in numbers unless an investment round
included Angels investing alongside a corporate venture group.
No contingent funding. If a company receives a commitment for $20M subject to
hitting certain milestones but first gets $8M, only the $8M is included in our data.
No business development/R&D arrangements whether transferable into equity
now, later or never. If a company signs a $300M R&D partnership with a larger
corporation, this is not equity financing nor is it from a venture capital firm. As a
result, it is not included.

Buyouts, Consolidations and Recapitalizations. All three of these of transaction

types are commonly employed by private equity firms and are tracked by CB
Insights. However, they are excluded for the purposes of this report. Private equity
investments into companies which may have received venture capital investment
prior are also not included.
Private placements. These investments also known as PIPEs (Private Investment in
Public Equities) even if made by a corporate venture group(s) are not included.
Debt/loans of any kind. Venture debt or any kind of debt/loan issued to emerging,
startup companies even if included as an additional part of an equity financing is not
included. If a company receives $3M with $2M from venture investors and $1M in
debt, only the $2M is included in these statistics.
Government funding. Grants, loans, equity financings by the federal government,
state agencies or public-private partnerships to emerging, startup companies are not
included. Strictly corporate venture outfits.
Incubator investments. Investments of money as equity or debt and/or services by
incubators are not included.

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Web | www.cbinsights.com
Twitter | @cbinsights
Tel | 212.292.3148

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