We have been tracking Series A deals in Web technology since the market mayhem in October 2008. Last month, we started researching this with our new partner, ChubbyBrain, which tracks this kind of data full-time. Launched in February 2009, ChubbyBrain is a New York City-based information services provider that democratizes startup and investor information. Early-stage investing is so important for the innovation economy, and the data we were seeing was either incomplete, only available quarterly, or presented with a negative slant. That is why we are presenting this data every month.
Healthy Month-to-Month Trend
Here are the month-to-month growth numbers, with growth percentages in parentheses:
- January: $30.3 million
- February: $45.5 million ($15.2 million, 33%)
- March: $55.7 million ($10.2 million, 18%)
- April: $73.7 million ($18.0 million, 24%)
- May: $178.2 million ($104.5 million, 59%)
Wow! Not only is that healthy, it looks like boom times are back.
Okay, hold on. As always, the details matter. In this case, we have one outlier deal: the $75 million invested in Fotolia by TA Associates. This is hardly a startup. But it is the first external institutional investor round, what is called “first-sequence financing” by the National Venture Capital Association (NVCA). So, technically it fits here, and that is how other researchers who track VC financing would categorize the deal. We call this growth equity, and we recently interviewed an investor who specializes in it. It is a very valuable part of the financing eco-system. But if you want a more purist early-stage view, cut it out. If you cut that deal out, the May numbers are “only” $103.2 million, or 29% month-over-month growth. To put it differently, April and May are already more than all of Q1. So, when we get the June numbers, we can be pretty certain that Q2 will be a lot better than Q1.
Cautionary note: we may be seeing growth because our research is now more comprehensive. In the past, the industry relied on surveys completed by VCs via the NVCA. ChubbyBrain uses multiple methods to track this data. They certainly miss some (and we’d like to hear about those in the comments here) but are probably catching more than others did using older methods. So the good news may not be as dramatic as it seems. But it still looks pretty promising.
You California dudes can just relax and get back in the hot tub with a Chardonnay. California still rules just fine with 15 out of 31 deals, giving it a 48% win, just shy of the crushing 50% mark. New York edged out Boston (take that, Beantown!) with 5 deals to 3. The rest of the country divided up a 26% slice of the pie with 8 deals.
Market Sector View
Categorization is always contentious, but here are the categories we saw (each with one deal, unless noted in parentheses):
- Advertising and marketing (3)
- Analytics and performance measurement
- Communications (2)
- Computer storage and peripherals
- Data storage
- Health and wellness
- Help desk
- Information provider
- Mobile (3)
- Monitoring and security
- Multimedia, graphics, and gaming software
- News and discussion (2)
- Retail e-commerce (3)
- Social Web (4)
- Undisclosed (stealth) (1)
Which Ventures Received Money?
This list includes only companies that (1) are US-based, (2) are in Web technology, (3) closed Series A deals, and (4) reported the amount. If we missed any, please tell us in the comments.
- 1000 Markets
- Aha Mobile
- Azuki Systems
- Babble Media
- Blue Rover Labs
- Cloud Engines
- Excl Fotolia
- Minyanville Media
- Onestop Internet
- Plastic Jungle
- Resonate Networks
- Social Collective
Which VCs Wired Money?
If multiple investors funded a single company, they’ll appear on the same line below. We’ve listed investors twice if they did more than one deal in May.
- ABS Capital Partners
- Baseline Ventures, Founders Fund, Betaworks, David Shen Ventures, Accelerator Group
- Bessemer Venture Partners
- Blumberg Capital, First Round Capital, Genacast Ventures
- Charles River Ventures
- Charles River Ventures, Shasta Ventures
- Draper Fisher Jurvetson, Benchmark Capital
- Founders Fund
- FoundersFund, Garrett Capital, Tim Ferriss
- Foundry Group
- Foundry Group, Draper Fisher Jurvetson Gotham, Bobby Yazdani, unknown investors
- Foundry Group, Vulcan Capital, unknown investors
- GADS Option Fund
- Geoff Entress, Best Buy Capital
- Greycroft Partners
- Harold Ickes, Alexander Gage
- Insight Venture Partners
- Kepha Partners, Sigma Partners
- LaunchBox Digital
- Peninsula Ventures, Allegis Capital, Tomvest Ventures
- Redpoint Ventures, August Capital
- Ross Siegelman, Bob Zipp, Josh Hannah
- RSG Capital
- Shasta Ventures, Bay Partners, First Round Capital, Harrison Metal
- TA Associates
- True Ventures
- Union Square Ventures, Naval Ravikant, Joshua Schachter