Despite concerns about rich valuations, venture capital firms continued to pour cash into California's technology heart in the second quarter.
VC funding for companies in the San Francisco Bay Area and Silicon Valley rocketed to nearly $8 billion in the quarter, up a massive 176% from the second quarter of 2013, according to data firm CB Insights.
The number of area companies receiving funding jumped to 361, up 24% from a year earlier.
At the top of the list were businesses that have already become global household names — Uber, Lyft, Airbnb and Pinterest.
The Bay Area's VC surge was the single biggest force driving total U.S. venture funding to $13.88 billion in the quarter, the most since the second quarter of 2001— the downslope of that period's dot-com boom.
California took 64% of all VC dollars invested nationwide in the latest quarter, up from 52% a year earlier.
What's more the VC rush is a reminder that there is a lot of liquidity in the market looking for returns, said Rod Werner, managing director of City National's Technology Group. "VC firms are especially hungry for companies with global ambitions," he said.
The latest quarter also shows that some investors, including mutual funds, are willing to pay up to invest in later-stage funding rounds for companies that may soon go public, Werner said.
They are trying to get their stake before the IPOs, he said.
Indeed, the top-10 list of Bay Area venture deals in the quarter was dominated by late-stage financings— so-called Series D, E and F investments. The biggest deal was a $1.2 billion Series D infusion for Uber, the San Francisco taxi-alternative company.
Yet Uber, among other up-and-coming firms, shows no hurry to go public, instead continuing to build up cash. More companies today are willing to stay private for longer, Werner said. That may partly reflect the rough post-IPO receptions for Facebook and Twitter in the last two years.
Underscoring the trend, nationwide, just 24 VC-backed companies went public in the quarter, down from 35 in the first quarter, according to CB Insights.
Besides the continuing rise of sharing-economy players such as Uber and Airbnb in the Bay Area, two of the regions green-tech companies also made the top-10 list of venture deals in the recent quarter.
Sunrun, a seven-year-old San Francisco-based solar panel installer, raised $150 million in Series E funds. And Atieva, a Redwood City-based firm that develops software to monitor battery cells in electric vehicles, raised $100 million in Series C funds. Atievas founders in 2007 included alumni of Tesla Motors.
EQUITY FINANCINGS FOR SILICON VALLEY VENTURE-BACKED COMPANIES*
|2 Q 2014||1 Q 2014||4 Q 2013||3 Q 2013||2 Q 2013|
|Number of Financing Deals||361||307||271||320||292|
|Amount Invested ($MM)||$7998.9||$4,871.9||$2,910.4||$3,409.9||$2,890.2|
TOP 10 DEALS IN SILICON VALLEY
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Uber||Mobile car service application||San Francisco||Series D||$1200||Kleiner Perkins Caufield & Byers, Menlo Ventures, Google Ventures, Summit Partners, BlackRock, Wellington Management, Fidelity Investments|
|Airbnb||Community marketplace for accommodations around the world||San Francisco||Series D||$500||Sequoia Capital, T. Rowe Price, TPG Capital, Dragoneer Investment Group|
|Lyft||Online social rideshare community||San Francisco||Series D||$250||Mayfield Fund, Founders Fund, Third Point, Andreessen Horowitz, Alibaba.com, Coatue Management|
|Pure Storage||All-flash enterprise storage||Mountain View||Series F||$225||Tiger Global Management, T. Rowe Price, Index Ventures, Greylock Partners, Redpoint Ventures, Sutter Hill Ventures, Wellington Management|
|Social catalog service that allows users to use an online pin board to share with the community||San Francisco||Series F||$200||Bessemer Venture Partners, FirstMark Capital, SV Angel, Andreessen Horowitz, Fidelity Investments, Valiant Capital Partners|
|Intarcia Therapeutics||Biopharmaceutical company developing therapies for long-term chronic therapy||Hayward||Growth Equity - III||$200||New Leaf Venture Partners, Farallon Capital Management, Franklin Templeton Investments, Quilvest Private Equity, RA Capital Management, Foresite Capital Management, Fred Alger Management|
|Automattic||Development and support of WordPress, a blogging platform||San Francisco||Series C||$160||Insight Venture Partners, True Ventures, Tiger Global Management, Chris Sacca, Iconiq Capital, Endurance International Group|
|SunRun||Solar energy installation and management services||San Francisco||Series E||$150||Sequoia Capital, Accel Partners, Foundation Capital, Madrone Capital Partners|
|Anaplan||Cloud-based enterprise planning platform||San Francisco||Series D||$100||Shasta Ventures, Meritech Capital Partners, Brookside Capital, DFJ Growth Fund, Salesforce, Workday, Granite Ventures, Sands Capital, Coatue Management|
|Atieva||Electric vehicle technology||Redwood City||Series C||$100||Tsing Capital|
* Quarterly tallies consist of equity rounds completed in the quarter and in which a venture capital or corporate venture firm participated in the round.
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