Venture capital surges to dot com levels

Venture capital deals in the US reached $48.3bn over 4,356 deals in 2014, an increase of 61% in value and 4% in number of deals from 2013, in a volume of dealflow unseen since the 2000 dot com crash.

The news came via The Money Tree report, produced by PricewaterhouseCoopers and the National Venture Capital Association, based on data from news provider Thompson Reuters.

Internet-based companies alone secured $11.9bn, marking the largest investment into the sector since 2000, with the software industry securing $19.8bn over 1,799 deals. The news has led some to speculate that a return to the dot com bust may be on the cards, but the report’s authors disagree, pointing to ‘megadeals’ as the reason for the large increase in value.

Mark McCaffrey, global software leader and technology partner at PwC, said: “For the first time in MoneyTree history, we saw two deals exceed one billion dollars and more than 40 megadeals — which are investments exceeding $100 million. In addition, there’s been an influx of private equity investors at a level we’ve not seen previously. As a result, entrepreneurial companies are capable of disrupting entire industries and leveraging investment dollars to expand to the global markets. With the continued economic conditions, we would expect venture capital investing to be positioned to continue strong levels of investing in 2015.”

At the same time, news in the UK emerged that life sciences companies in the country have also seen their investments surge. In 2014, investments increased 41% to $713m, according to news provider The Sunday Telegraph.

The increased pick up in funding has been largely driven by university spin-outs, with Oxford’s Adaptimmune ($104m) and Imperial College London’s Cell Medica ($78.6m) both attracting large amounts in venture capital backing.