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Q4 Venture Capital Funding: “Disrupts The Disruptors.”

By Rob Starr, Big4.com Content Manager

Marking the juggernaut of venture capital funding in the United States with a series of superlatives and feel good stats is becoming common. The latest wave from The MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, for 2015 is no exception. The fourth quarter ended the year on a further upbeat note with venture capital deploying $58.8 billion across the United States. That particular statistic marks the highest full year total in the last twenty years.
This calendar year also saw 74 megadeals defined as investments of $100 million or more, which represents a spike from the 50 in 2014. Tom Ciccolella, US Venture Capital Market Leader at PwC frames the upward trend up this way.

Put To Work
“There’s been over $100 billion dollars put into the system in the past eight quarters and that’s money that’s going to start getting put to work,” he says. “There’s still an appetite for new and exciting and disruptive technologies.”
Noteworthy spikes included those in the Financial Services industry (up 183%) and the Healthcare Services which were up 133 percent. While megadeals drooped in Q4, more than

Tom Ciccolella

Tom Ciccolella

half of the deals this year went to early stage and seed companies, with over 1,400 newbies raising venture capital for the very first time.

Financial Services
When it comes to financial services Ciccolella sees an interest from a wider variety of players utilizing the disruptive technologies behind the change.
“You see quotes from bankers talking about the disruption to their industry,” he said noting that beyond the venture capitalists , there are other corporate interests and the likes of money managers and even loan companies doing what the banks do using a different model.
“Venture capitalists are pretty excited about this new spider web around financial institutions,” he says adding that the predominance of new disruptive technologies is an important driver making the industry attractive to venture capital investors.
“With a financial company you can use technology to get different kinds of currency quickly without paying exorbitant rates. Now you can get online and go from a hundred customers to a million to a hundred million.”

Trend
Disruption is another trend that’s become one of the new norms. Ciccolella sees clearly how the latest technologies have caught the eyes of investors and will continue to do so for the foreseeable future in a business aquarium where the big fish aren’t always dominant.
“It’s not steady as she goes for anyone,” he said. “While it’s a big circle ultimately, we’re seeing the disruptors being disrupted.”
The average early stage deal in the fourth quarter was $10 million, up from $9 million in the previous quarter according to The PwC/NVCA MoneyTree Report.

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