White Paper | September 2016

Private Tech Growth Emerges as an Asset Class

Key Highlights on Private Tech funding trends:

  • Roughly $200B Invested in U.S. Private Tech Companies Since 2009. 2015 and 2014 ranked No. 3 and No. 4 in past 20 years as far as dollars invested in US-based private tech companies (followed by 2000 at #1 and 1999 at No. 2). And, 1H:16 trends indicate that 2016 could very well end up grabbing the silver medal, exceeding 1999 levels.
  • Late-stage $100MM Private IPOs captured more than 70% of incremental VC dollars invested since 2013. Since 2013, VC dollars invested in US-based private tech companies have doubled, driven by 8x increase in the dollars raised via late- stage mega deals (more than $100MM per financing).
  • Very late-stage $500MM giga-deals have emerged. There have been 18 such mega $500MM+ financing rounds worth $21.5B since late 2014, accounting for 25% of capital invested in US-based private tech companies. Clearly, there is a growing focus on and investor/capital concentration around a select group of mature, very late-stage private tech companies
  • Overall investment no longer at FOMO levels, as investors concentrating among category winners. Excluding mega deals to mega-cap private tech players, we estimate that gross dollars raised by U.S.-based private tech companies have declined 10% in 1H:16 on a year-on-year basis. We’d expect the ongoing normalization in private tech investment activity to continue as the investor sentiment pendulum continues to swing from “Fear Of Missing Out” (FOMO) to “Fear Of Jumping In” (FOJI) across all stages/deal sizes.

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