10/27/2015

Techfundingsurgingdespitebubblefears:survey:::DailyFTBeEmpowered

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SURGING DESPITE BUBBLE FEARS: SURVEY

Tech funding surging despite bubble fears: survey

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AFP:Investorspouredincreasingamountsofcashintostartupsinthethirdquarter,defyingfearsofa
bubbleinthetechsector,asurveyshowedWednesday.
Atotalof1,799venturebackedstartupsaroundtheworldpulledin$37.6billioninfundinginthe
quarter,thehighestsince2001,accordingtothesurveybyCBInsightsandKPMG.
Thevastmajorityofthefunding77%inthequarterwenttotechnologystartups,accordingtothe
report.Thelargestothersegmentwashealthcare,includingdigitalhealthstartups,takingin12%.
Venturefundingsofarthisyearhashit$98.4billion,alreadyeclipsingthe2014totalof$88.7billion
anddoubletheamountof2013.
Butthesurveydidfindsomesignsofcoolingoftechinvestmentfever.
Alargeshareofthefundswenttomegadealsof$100millionormore,andthemoneyflowinginto
earlystageorseedfundingfellforafifthconsecutivequarter.
Tenofthedealstopped$500millionandmorethan60dealsdrewinexcessof$100million,
accordingtothesurvey,withlargestartupssuchasUberandAirbnbeschewinginitialpublicofferings.
Only23%ofthefundingwenttoearlystagedeals,thelowestlevelinfivequarters.
Today,therearemorelatestagedealsandfewerIPOexitsthaninyearspast,thereportsaid.This
maybeaffectingtheavailabilityofcashforseedinvestment.

Unicornsproliferating
Thecashflowhasledtoacceleratinggrowthinthenumberofbilliondollarstartups,whichhave
becomeknownasunicorns.
Atotalof23unicornswerecreatedinthepastquarter17intheUnitedStatesbringthetotalto58
sofarthisyear.AccordingtoCBInsights,thereare104unicornsworldwidewithacombinedvaluation
of$503billion.
TheNorthAmericaregiondrewthelionsshareofventurefundinginthequarterat$20.3billion,while
Asianbasedstartupstookin$13.5billionandEuropeanfirms$3.6billion,thereportshowed.
SomeofthebigAsianinvestmentswenttoChinesetransportstartupDidiKuaidi,Shanghaifood
deliverygroupEle.meandIndiasecommercefirmSnapdeal.NotablestartupsinEuropepullingin
cashinthepastquarterincludeFrancescarsharingBlablacarandGermanfoodprepgroup
Hellofresh.
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10/27/2015

Techfundingsurgingdespitebubblefears:survey:::DailyFTBeEmpowered

Hellofresh.
Bysector,Internetandmobilecommunicationsrepresentedthebulkofventurebackedinvestments,
accountingfor67%ofalldealsinthequarter.Otherimportantsectorsincludingfinancialtechnology
startups,whichdrew$3billioninthepastquarterledbyonlinelenderSocialFinance,anddigital
health,with$1.46billionledbyChinasGuahaoandUSbasedZocdoc.

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