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Venture capitalists lead overall swing back to economic health with $9.9 billion in 1,023 deals in the third quarter of 2014

By Rob Starr, Big4.com Content Manager

“At first glance you notice that we’re down from Q2,” Mark McCaffrey, global software leader and technology partner at PwC said by way of starting our conversation on the latest installment of The MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, “but the reality is Q2 was so high, there’s not a comparable number.”

He mentions the kind of deals that skewered the research included a $1.2 billion investment in a transportation software company, furthering that because those heights won’t be equaled anytime soon, the apparent lag in Q3 needs to be tempered with this perspective. In fact, he says the macro picture is nothing short of positive.

“I really looked at Q3 and then I looked at Q1 and last year and saw that we were still on the

Mark McCaffrey

Mark McCaffrey

same track with a lot of deals happening and software continuing to be the strong play.”

Software

Software continued to lead the way and receive the highest level of funding for all the industries with $3.7 billion in investments in Q3. As well, many non-traditional investors coming to the market helped to build the solid foundation.

In addition, the year to date number at $33 billion is a further positive benchmark eclipsing all of 2013.

“We’re well on track for hitting over $40 billon for the year which are numbers we haven’t seen for a very long time,” McCaffrey says adding the cautionary note that markets are volatile and things can change. “Still,” he says, “I think we’re seeing a lot of the benefits software can bring into play as a megatrend.”

Disruptive Technologies

He also stressed the value being created by some of the other disruptive technologies like Media and Entertainment, transportation and even oil and gas was real and presented a solid underpinning for a sustained recovery.

In fact, Media and Entertainment was second for Q3 with $1.8 billion going into 118 deals.

“There’s no doubt to me those technologies are really creating value in our markets and people are investing in value,” McCaffrey says. The other big driver is the fact technology companies aren’t waiting but in fact are going global almost immediately.

“Those dynamics to investors coming into the market are very attractive. We know that different things can come into play but with interest rates remaining low, this is still an attractive area,” he says. “The ROIs are high and non-traditional investors are coming in mass force with a lot of cash and I haven’t seen any changes in those principles in this quarter.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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