United States Venture Capital Review

FIRST QUARTER 2019 Table of Contents

United States VC Market in Q1 2019 2

$ Invested and # Companies Financed 3

Top VC Deals 5

Top VC Investors 6

Investment by Company Location 7

Investment by Round Size & Stage 9

United States VC Investment from Foreign Sources 12

Investment by Company Sector 13

VC Funds Raised 16

VC-Backed Exits 17

VC Returns 18

Explanatory Notes & Contacts 19

1 United States Venture Capital Market Activity: First Quarter 2019

Venture Capital Investment Venture capital investment in United States-based companies continued at a strong pace in the first quarter of 2019, with a total of $26.8 billion invested in 1,088 VC deals. In dollar terms, this represented an outstanding quarter, up 30% over Q1 last year, and the fifth highest individual quarter on record. It also marked the fifth consecutive quarter with US VC deal values exceeding $20 billion. Overall, deal volumes have remained mostly flat across the United States in recent years. Deals completed in the first quarter were down 2% quarter-over-quarter, down 8% from the same period last year, and have not shown appreciable growth in six years. Venture Capital Industry Leaders Top deals for the quarter were led by New York-based collaborative workspaces company WeWork, which raised $2 billion. The next three largest deals, all based in California, were Flexport, Nuro, and Aurora Innovation, which raised $1 billion, $940 million, and $530 million respectively; the former in the freight & brokerage technology industry, and the latter two in the field of self-driving vehicles. The most active VC investors over the Q1 period included New Enterprise Associates, GV Management, and Sequoia Capital, each of which announced participation in over 20 US VC deals in the first quarter. Venture Capital Fundraising & Exits A total of 143 U.S. VC funds recorded a close in Q1 2019, an eighteen-year high and the most in an individual quarter since Q4 2000. Dollars raised jumped 38% over the same period last year. A total of 126 VC exits were completed in Q1 2019. With total proceeds of $12.8 billion from trade sales and $5.8 billion from public exits, both sets of proceeds were over 2.5 times what they had been just one year ago. Venture Capital Fund Performance United States private independent venture capital and growth equity funds show improving performance, but only growth equity funds significantly outperformed the public markets in 2018. Preliminary data provided by Cambridge Associates shows U.S. growth equity funds with vintage years of 2000 or greater returning a since inception IRR of 12.2% as of the end of Q4, while U.S. VC funds fared worse with an IRR of 8.6%.

2 With $27 Billion Invested in Q1, U.S. Companies Poised to Break Dot-Com Record United States companies secured $26.8 billion in Q1 2019, the fifth strongest individual quarter ever recorded. Total venture capital deal values in Q1 surged 30% over the same period last year, even surpassing some full year totals set just ten years ago.

$120 $107 $104 $100

$80 $68 $61 $56 $60 $53 $49 $42 $40 $33 $32 $32 $31 Deal Values ($ Billions) ($ Values Deal $29 $28 $27 $23 $25 $23 $20 $24 $21 VC VC $20

$0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Q1 Q2 Q3 Q4

3 Six Years Flat: No More VC Deals Being Completed Than in 2013 While deal sizes were up, There were 1,088 deals completed in the first quarter, down 2% quarter-over-quarter and down 8% from the same period last year.

9,000 8,254 8,000

7,000

6,000 5,735

4,792 5,000 4,764 4,536 4,622 4,326 4,337 4,335 4,175 4,394 4,252 3,987 4,075 4,000 3,776 3,297 3,375 3,115 3,305 3,304 # of VC Deals VC of # 3,000

2,000 1,088 1,000

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Q1 Q2 Q3 Q4

4 Top United States Venture Capital Deals

Portfolio Company Investors Deal Value Rank Company Name Location Sector Investing Firms (Disclosed) ($ Millions)

1 WeWork $2,000 New York, NY Collaborative Workspaces SoftBank Group 2 SoftBank Vision Fund, Founders Fund, DST Global, Flexport $1,000 San Francisco, CA Freight & Brokerage Technology Cherubic Ventures, Susa Ventures, SF Express 3 Nuro $940 Mountain View, CA Self-Driving Vehicles SoftBank Group Sequoia Capital, Amazon, T. Rowe Price Associates, 4 Aurora Innovation $530 Palo Alto, CA Self-Driving Vehicles Lightspeed Venture Partners, Geodesic, Shell Ventures, Reinvent Capital, Greylock, Index Ventures 5 Clover Health $500 San Francisco, CA Health Insurance Analytics Greenoaks Capital 6* Foundry Group, RRE Ventures, Corazon Capital, WTI, Knockaway $400 San Francisco, CA Real Estate Sales Platform FJ Labs, Company Ventures Temasek, Dragoneer Investment Group, Softbank 6* DoorDash $400 San Francisco, CA Food Delivery Service Vision Fund, DST Global, Coatue Management, GIC, Sequoia Capital, Y Combinator 6* Accel Partners , Earlybird Venture Capital , Sequoia UiPath $400 New York, NY Automation platforms Capital, Credo Ventures 9 Vir Biotechnology $328 San Francisco, CA Disease Biotechnology Alta Partners Andreessen Horowitz, Bain Capital Ventures, Fidelity Investments, Google Ventures, Institutional Venture Partners, Alphabet, Coatue Management, DCM Ventures, Fifth Wall Ventures, GGV Capital, 10 Lime $310 San Mateo, CA Bike-Sharing GIC Pte. Ltd. GSV Capital Corp, FJ Labs, Bling Capital, GR Capital, St. Augustine Partners

5 Top VC Investors in United States Companies, Q1 2019

Estimated Investment League Table rankings of top VC investors include only publicly- Rank Firm Name # of Deals ($ Millions) disclosed investment activity made in United States portfolio companies. Estimated investment activity is based on the actual syndicate Top Investors, In U.S. Venture Capital Deals breakdown, where available, and is split equally among disclosed investors where actual breakdowns are not available. Rankings capture New Enterprise Associates Inc 26 $238.8 1 the three-month period from January 1st, 2019 to March 31st, 2019. 2 GV Management Co LLC 22 $240.5 Deals are tracked by their completion date when known, and by their 3 Sequoia Capital Operations LLC 20 $446.7 announcement date when their completion date is unknown. All data is th 4 Y Combinator Inc 17 $115.5 as of April 15 , 2019.

5 Norwest Venture Partners 16 $125.9 League tables include eligible seed, early stage, later stage, and expansion. Refinitiv begins tracking rounds at the first investment from a 6 Bessemer Venture Partners 14 $91.0 venture capital firm and tracks all subsequent equity financing rounds. 7 Andreessen Horowitz LLC 13 $106.3 Angel, incubator and similar investments are considered pre-venture financing if the company has received no prior qualifying venture capital Kleiner Perkins 12 $110.3 8 investment and are not included in the report. 9 Connecticut Innovations Inc 12 $7.1 Deals with undisclosed dollar values are rank eligible but with no 10 Innovation Works Inc 12 $3.2 corresponding Estimated Investment value. Non-US dollar denominated 11 Battery Ventures LP 11 $116.4 transactions are converted to the US dollar equivalent at the time of announcement of terms. 12 Goldman Sachs & Co LLC 11 $105.4 13 Alexandria Venture Investments 11 $67.9 14 Bain Capital Venture Partners LLC 10 $160.8 15 Ben Franklin Technology Partners Southeastern PA 10 $3.2 16 Index Ventures SA 9 $141.6 17 Versant Venture Management LLC 9 $87.7 18 General Catalyst Partners LLC 9 $79.2 19 M12 9 $78.5 20 Launch Angels Management Company LLC 9 $9.0 6 United States Venture Capital Deals by State, Q1 2019 United States companies secured $26.8 billion in Q1 2019, with New York vaulting ahead of Massachusetts as compared to Q1 2018. Maryland tumbled from 4th place to 10th. California retained a 53% share of national VC activity.

State Rankings, Q1 2019 Invested Year-Over-Year Invested Year-Over-Year Rank State # Deals Rank State # Deals ($ Millions) Change in $ Invested ($ Millions) Change in $ Invested 1 California 377 14,102.2 ▲18.2% 16 Florida 15 121.4 ▲17.6% 2 New York 152 4,903.4 ▲118.1% 17 Connecticut 18 119.2 ▲1,026.7% 3 Massachusetts 102 2,558.3 ▼-4.0% 18 Missouri 7 111.4 ▲79.2% 4 Texas 68 1,078.8 ▲151.8% 19 Michigan 9 75.5 ▲52.1% 5 New Jersey 11 604.6 ▲52.4% 20 D. of Columbia 3 71.5 ▲1,329.4% 6 Washington 33 555.2 ▲77.1% 21 Minnesota 12 60.0 ▼-52.7% 7 Pennsylvania 48 350.2 ▲44.0% 22 Arizona 8 59.0 ▲83.3% 8 Colorado 30 315.0 ▲37.5% 23 Tennessee 10 57.9 ▼-20.6% 9 Illinois 30 269.4 ▲0.5% 24 North Carolina 12 40.4 ▼-76.0% 10 Maryland 17 226.7 ▼-49.3% 25 Indiana 7 29.6 ▼-39.9% 11 Utah 12 183.6 ▲28.2% 26 Iowa 3 28.0 ▲110.3% 12 Ohio 20 166.7 ▲11.9% 27 Nevada 2 26.0 ▲271.4% 13 Georgia 13 151.5 ▲442.1% 28 New Hampshire 1 19.7 ▲358.5% 14 Virginia 21 151.1 ▲72.7% 29 Wisconsin 5 18.4 ▲55.0% 15 Oregon 12 124.9 ▲201.0% 30 Idaho 2 18.0 ▼-59.1%

7 United States Venture Capital Deals by Metro Region, Q1 2019 United States companies secured $26.8 billion in Q1 2019, with New York City rising to second place, while Seattle rose from 9th place to 6th, as compared to the first quarter of 2018.

State Rankings, Q1 2019 Invested Year-Over-Year Rank State # Deals ($ Millions) Change in $ Invested

1 San Francisco 163 6,636.34 ▲18.1% 2 New York City 166 5,495.12 ▲123.5% 3 San Jose 140 5,300.91 ▲23.1% 4 Boston 98 2,544.02 ▼-4.1% Eastern Seaboard: Avg $26 M 5 Los Angeles 40 1,605.95 ▲22.5% Northern CA: Avg $39 M 6 Seattle 33 555.19 ▲91.8% 7 Austin 34 543.22 ▲180.4% 8 Washington Metroplex 41 449.23 ▼-16.8% Southern CA: Avg $30 M 9 Denver 29 304.97 ▲38.3% 10 Houston 12 298.57 ▲435.4% Texas: Avg $30 M 11 Philadelphia 28 279.53 ▲29.4% 12 Chicago 31 279.38 ▲4.6% 13 San Diego 22 277.97 ▼-25.8% 14 Orange County 11 276.31 ▲44.2% 15 Dallas 20 235.06 ▲36.8%

8 Venture Capital Investment for First Quarter by Round Size Range Investment rounds smaller than $10 million made up 51% of all deals for the year. Rounds ranging from $10 million to below $100 million represented a 36% share of volumes and a 42% share of dollar values.

4% 8% 11% 9%

8% >= $1 Billion

$500 - $999 Million $26.8 Billion 36% $100 - $499 Million 1,088 Deals Invested 42% $10 - $99 Million

31% < $10 Million 51%

Deal Values Undisclosed

9 Later Stage Deals Take Recent Gains Seed and early stage VC deals combined accounted for only 48% of all deal activity in Q1, the first time this percentage fell under 50% since Q1 2017.

100%

90%

80%

70%

60%

50%

40% # of VC Deals VC of # 30%

20%

10%

0% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Seed Early Stage Later Stage Expansion

10 The Rise of the Megadeal: Rounds $100 Million & Up Average $273 Million Apiece Investment rounds $100 million and up took $13.1 billion in Q1, nearly half the national total. With 48 such deals, Q1 2019 set a new all-time high, though this was not a new development, as Q1 marked the fifth consecutive quarter in which a new record had been set.

60

50 Computer Software 23%

40 35%

Internet Specific ≥ $100 Million $100 ≥ 30 Q1 2019 48 Deals

20 ≥ $100 Million

Life Sciences 17% # of VC Deals Deals VC of # 10

Other 25% 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

11 Venture Capital Investment from Non-Resident Sources Foreign funds invested $5.1 billion into United States-based companies in Q1 2019, led by firms based in Japan and the United Kingdom, which collectively invested $3.5 billion.

$261m 15% $1,519m

$335m $2,030m 4% 40% 5%

6% 188m

30%

Japan United Kingdom China Russia Brazil Other Nations

12 Artificial Intelligence Continues Its Tear into the First Quarter A total of 101 rounds brought $2.5 billion to U.S Artificial Intelligence & Machine Learning companies in the first quarter, with an average round size of $25 million, the second highest quarterly average ever recorded.

$6 120 Invested Rank Company Name Industry Location ($ Millions) $5 100 Self-Driving Mountain View, 1 Nuro $940 Vehicles CA

$4 80

Thousands Self-Driving Palo Alto, 2 Aurora Innovations $530 Vehicles CA $3 60 Artificial

# of VC Deals of # VC Menlo Park, 3 Globality Intelligence $100

Deal Values ($Billions) Values Deal CA

$2 40 Interfaces VC VC Artificial San Diego, $1 20 4 Erasca Intelligence Drug $58 CA Discovery

$0 0 Artificial Lifemine Cambridge, 5 Intelligence $45 2015 2016 2017 2018 2019 Therapeutics MA Genomics

Q1 Q2 Q3 Q4 # of Q1 Deals

13 Cybersecurity Sees Several Rounds Over $50 Million A total of 55 rounds brought $1.1 billion to U.S Internet Security companies in the first quarter, with an average round size of $20 million, a strong start to the year, but not setting any new records.

$4 60 Invested Rank Company Name Industry Location ($ Millions) 50 Internet San Francisco, $3 1 Cloudflare $150 Performance CA

40

Thousands Access San Francisco, 2 OneLogin $100 Management CA $2 30

# of VC Deals of # VC Services Independence, 3 Keyfactor $77

Deal Values ($Billions) Values Deal 20 Platforms OH

VC VC $1 Cloud Computing 10 4 Illumio $65 Sunnyvale, CA Security

$0 0 Application 5 Contrast Security $65 Los Altos, CA 2015 2016 2017 2018 2019 Security Testing

Q1 Q2 Q3 Q4 # of Q1 Deals

14 Life Sciences Companies See Few Large Deals in Q1 Though U.S. Life Sciences Companies raised $5 billion in 212 rounds of financing, dollars invested were still down 9% from the first quarter of 2018.

$25 250 Invested Rank Company Name Industry Location ($ Millions)

$20 200 Disease San Francisco, 1 Vir Biotechnology $328

Biotechnology CA

Thousands $15 150 Genetic Disease 2 BridgeBio $299 Palo Alto, CA Medicine

$10 100 Deals of # VC

3 Sana Biotechology Engineered Cells $204 Seattle, WA

Deal Values ($Billions) Values Deal VC VC Genetically $5 50 Redwood City, 4 Maze Therapeutics Modified $136 CA Therapies $0 0 Cancer 5 Peleton Therapeutics $150 Dallas, TX 2015 2016 2017 2018 2019 Treatments

Q1 Q2 Q3 Q4 # of Q1 Deals

15 Venture Capital Fundraising by United States Firms A total of 143 U.S. venture capital funds recorded a close in Q1 2019, an eighteen-year high and the most in an individual quarter since Q4 2000. Dollars raised jumped 38% over the same period last year.

$60

$48.2

$50

$43.2

$40 $35.3

$30.9 $30.0 $30

$21.5 $19.3 $20 $17.9

$13.3 $13.1 Funds Raised ($ Billions) ($ Raised Funds $10

$0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 Q2 Q3 Q4

16 Venture Capital Exit Values from United States Companies A total of 126 venture capital exits were completed in Q1 2019. With total proceeds of $32.4 billion from trade sales and $5.8 billion from public exits, both sets of proceeds were over 2.5 times what they had been just one year ago.

$100 $89.0 $88.2 $90 $84.5

$80 $75.0

$70 $67.4

$60 $54.8

$50 $48.1 $46.7 $41.9 $38.2 $40

$30

VC Exit Values ($ Billions) ($ Values ExitVC $20

$10

$0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 M&A Public Secondary Sale

17 Cambridge Associates: Venture Capital Fund Performance United States private independent venture capital and growth equity funds show improving performance. Venture capital funds outperformed public markets for the first time since 2015.

13% 13%

12.2% 12% 12%

11% 11%

10% 10%

9% 9% 8.6% 8% 8%

7% 7%

6% 6% Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 United States Venture Capital Funds United States Growth Equity Funds mPME: Russell 3000 Index mPME: Russell 3000 Index

Source: Cambridge Associates 18 Explanatory Notes

1. Data collected and analyzed by Refinitiv for this statistical report were drawn from a variety of sources including Refinitiv M&A databases, regulatory filings, press releases, and proprietary reports from U.S. and non-resident venture capital firms, private equity firms, law firms, and other service providers.

2. The Refinitiv venture capital report measures cash for equity and quasi-equity investments by the professional venture capital community in emerging companies in the United States.

3. The report includes the investment activity of professional venture capital firms, whether U.S.-based or not, including private independent funds, venture arms of corporations, institutions, government funds, angel funds, and similar entities whose primary activity is financial investing. Where there are additional participants such as angels, corporations, governments, or company officers in a qualified and verified financing round, the entire amount of the round is included.

4. The report excludes venture debt, buyouts, recapitalizations, secondary purchases, IPO exits, and other forms of private equity that do not involve cash such as services-in-kind.

5. Fund performance data and public market equivalents are produced via the Cambridge Associates Benchmark Calculator, available through Eikon. Returns are for United States venture capital and growth equity funds with vintage years of 2000 or greater, on a first cash flow basis, in U.S. dollars, from inception to the end of the indicated quarter, under preliminary data mode Q4 2018. Pooled internal rates of return are net of fees, expenses and carried interest. CA Modified Public Market Equivalent (mPME) replicates private investment performance under public market conditions. The public index’s shares are purchased and sold according to the private fund cash flow schedule, with distributions calculated in the same proportion as the private fund, and mPME NAV is a function of mPME cash flows and public index returns. 6. All current and previous years data is as of Monday, April 15th, 2019. Data is continuously updated and is therefore subject to change. All figures are in U.S. dollars unless otherwise noted.

7. League Table rankings of top VC investors include only publicly-disclosed investment activity made in United States portfolio companies. Estimated investment activity is based on the actual syndicate breakdown, where available, and is split equally among disclosed investors where actual breakdowns are not available. Rankings capture the three-month period from January 1st, 2019 to March 31st, 2019. League Tables of top legal advisors include all venture capital (VC) deals occurring globally in the 2018 calendar year of which Refinitiv was made aware. Deals are tracked by their completion date when known, and by their announcement date when their completion date is unknown. 8. League tables include eligible seed, early stage, later stage, and expansion and other similar stages of VC investment. Refinitiv begins tracking rounds at the first investment from a venture capital firm and tracks all subsequent equity financing rounds. Angel, incubator and similar investments are considered pre-venture financing if the company has received no prior qualifying venture capital investment and are not included in the report. Deals with undisclosed dollar values are rank eligible but with no corresponding Estimated Investment or Deal value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms.

19 Explanatory Notes

While Refinitiv has used reasonable endeavors to ensure that the information provided in this document is accurate and up to date as at the time of issue, neither Refinitiv nor its third party content providers shall be liable for any errors, inaccuracies or delays in the information, nor for any actions taken in reliance thereon, nor does it endorse any views or opinions of any third party content provider. Refinitiv disclaims all warranties, express or implied, as to the accuracy or completeness of any of the content provided, or as to the fitness of the content for any purpose to the extent permitted by law. The content herein is not appropriate for the purposes of making a decision to carry out a transaction or trade and does not provide any form of advice (investment, tax, legal) amounting to investment advice, nor make any recommendations or solicitations regarding particular financial instruments, investments or products, including the buying or selling of securities. Refinitiv has not undertaken any liability or obligation relating to the purchase or sale of securities for or by any person in connection with this document. For further information on Refinitiv’s venture capital and private equity offerings, please visit us at: https://www.refinitiv.com/en/products/eikon-trading-software/private-equity-data/

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Contributors to this analysis are provided with additional packages of data. If you would like to participate in the submission process, receive quarterly press releases, or have questions about our venture capital criteria, please contact us at:

Gavin Penny Merissa Selts E-mail: [email protected] E-mail: [email protected] Tel: 416-687-7577 Tel: 646-223-8415

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