Florida Venture Capital Investment Highlights

Florida Venture Capital Investment
Highlights - YTD June 2014
Florida Venture Capital Investment Activity Ranked 14th Compared To Investments
In Other States
Prepared By Cherrystone Management Consultants Inc. in
Conjunction with InternetCoast
July 2014
Dale Gregory, Executive Director, InternetCoast & Executive Vice
President, Cherrystone Management Consultants Inc.
561 212 8385 [email protected]
FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Table of Contents
Florida Highlights
Florida's Share of U.S. Venture Capital Investment Activity
Florida Investment Activity By Industry Sector
Florida Investment Activity By Stage of Development
Investment Activity By Enterprise Florida Region
Investment Activity in South Florida
Tables
Table 1. Comparison of 2013 & 2014 Florida & Total U.S. Venture Capital Transactions &
Investments
Table 2. Comparison of 2013 & 2014 Florida Venture Capital Investment By Industry Sector
Table 3. Comparison of 2013 & 2014 Florida Venture Capital Investments By Stage of
Development
Table 4. 1H 2014 Venture Capital Investment By Enterprise Florida Region
Table 5. 1H 2014 South Florida Venture Capital Investment By Industry Sector
Table 6. 1H 2014 South Florida Venture Capital Investment By Stage of Development
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
The timing of venture capital investments, particularly at the State and local level, are
dependent on many variables, and anything but uniform in nature. Hence, benchmarking
performance using quarterly data may not accurately reflect current performance or future
trends. InternetCoast's benchmarking approach uses a six month and twelve month rolling
average. While Florida's share of U.S. venture capital investment activity is anemic, a snapshot
of performance is highly dependent on the period of analysis.
For example, depending on the measurement period, Florida venture capital activity for the
quarter ended June 30 could be depicted as "the good, the bad, or the ugly" using a twelve, six,
and three month analysis horizon.
% of U.S.
Investment
Investment Activity
Florida
($millions)
Analysis Period Ending June 30
2013 2014
% Change
2013
2014
Three Months
$168 $113
-32.7%
2.3%
0.9%
Six Months
$189 $185
-2.1%
1.4%
0.8%
12 Months
$256 $422
64.8%
1.0%
1.1%
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
Investment Activity
Total U.S.
Analysis Period Ending June 30
Three Months
($millions)
2013
2014
% Change
$7,171
$12,969
80.9%
Six Months
$13,235
$22,679
71.4%
12 Months
$26,905
$39,137
45.5%
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
Our analysis of second quarter venture capital activity is a companion to the InternetCoast
"Florida Venture Capital Highlights" report published in May 2014. The YTD June 2014 report
compares six months (1H 2014) and twelve month periods ending June 30, 2014 with the same
timeframes in 2013. The report includes investment activity by industry sector, stage of
development, Enterprise Florida region, and South Florida region.
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
The report was prepared by Cherrystone Management Consultants for InternetCoast. The
source information for the report is the PwC/NVCA MoneyTree™ Report with data provided by
Thomson Reuters.1
Florida Highlights





Florida's Share of U.S. Venture Capital Investment
o .8 percent during 1H 2014 compared to 1.4 percent in 1H 2013
o 1.1 percent during the twelve months ending June 30, 2014 compared to 1.0
percent during the same period in 2013.
Florida ranked 14th and 12 compared to other States based on 1H2014 and 12 months
ended June 30 venture capital investments
Venture Capital Investment
o 1H 2014 and 1H 2013: $185 million invested in 25 transactions compared to
$189 million and 26 transactions
o 12 months ending June 30: $422 million invested in 50 transactions in 2014
compared to $256 million in 45 transactions in 2013
Industry Sector Activity
o 1H 2013 to 1H 2014
 Software sector doubled from $53.5 to $110 million
 Industrial/Energy increased from $1.7 to $39.2 million
 Healthcare Services increased from $1.1to $10.5 million
o 12 Months Ending June 30 2013 To 2014
 Software sector increased from $60 to $251 million
 Industrial/Energy increased from $ to $ million
 Medical Devices & Equipment increased from $ to $ million
o Biotechnology, Media & Entertainment, Medical Devices/Equipment and
Telecommunications sectors declined substantially
1H 2014 Enterprise Florida Regions
o East Central (Orlando): Six transactions worth $75.7 million compared to $32.3
million in 2013
o South Florida: Thirteen transactions worth $70.4 million compared to $112.2
million in 2013
o Tampa Bay: Five transactions worth $36.7 million compared to $29.8 million in
1H 2013
o North Central (Gainesville): One transaction worth $2 million compared to $10.1
million in 1H 2013
1
The National Venture Capital Association (NVCA) is the voice of the U.S. venture capital community (nvca.org). PricewaterhouseCoopers
(PwC) is a global company that helps organizations and individuals create the value they're looking for. The MoneyTree report can be accessed
at pwcmoneytree.com. Thomson Reuters is a multinational media and information firm.
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Florida's Share of U.S. Venture Capital Investment Activity
Florida businesses raised $185 million from venture capitalists from 26 transactions in 1H 2014,
compared to $189 million and 26 transactions in 1H 2013. Nationally, 1H 2014 venture capital
investments increased 71 percent to $22.7 billion compared to 1H 2013.
During the twelve months ending June 30, 2014 Florida businesses raised $422 million from 50
transactions, a 65 percent increase in dollars raised compared to 2013. Nationally, venture
capital investments increased 45 percent during the twelve months ending June 30, 2014.
Florida's "share" of U.S. venture capital investments during the twelve months ending June 30,
2014 was 1.1 percent compared to 1 percent during the same period in 2013. Florida's share
has been in declining for many years, peaking at 3.4 percent in 1997.
Table 1. Comparison of 2013 & 2014 Florida & Total U.S.
Venture Capital Transactions & Investments
($millions)
Six Months Ended June
Twelve Months Ended June
2013
2014
2013
2014
$13,235
$22,679
$26,905
$39,137
Florida
$189
$185
$256
$422
% of U.S.
1.4%
0.8%
1.0%
1.1%
Investment
Total U.S.
Benchmark Ranking
14
12
Transactions
Total U.S.
Florida
% of U.S.
1,923
2,099
3,938
4,282
26
26
45
50
1.4%
1.2%
1.1%
1.2%
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
During the 1H 2014 California businesses received $13.6 billion or 60 percent of all venture
capital investments in the U.S. Massachusetts ($2.1 billion), New York ($1.8 billion), Texas
($700 million), and Washington ($532 million) round out the top five states. Businesses in the
top five states received more than 80 percent of all venture capital investments during 1H 2014
and the twelve months ending June 30, 2014.
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Florida Investment Activity By Industry Sector
Florida's software sector was the most active industry sector during 1H 2014. There were 14
software industry transactions in 1H 2014 valued at $110 million, compared 10 transactions and
$53.5 in 1H 2013. Other active sectors during 1H 2014 include the industrial/energy and
healthcare services sectors. Sectors experience a decline in investment activity included the
biotechnology (-$11.4 million), media & entertainment (-$72 million), medical devices &
equipment (-$11.4 million), and telecommunications (-$17.7 million) sectors.
Florida's software sector for the twelve months ending June 30, 2014 raised $251 million from
venture capitalists compared to $60 million during the same period in 2013. Other active
sectors during the twelve months ended June 30 include industrial/energy ($45.7 million) and
medical devices & equipment ($24.7 million). Sectors experiencing a decline in investment
activity include the financial services (-$11.3), IT services (-$15 million), media & entertainment
(-$70 million), and telecommunications (-$17.7 million) sectors.
The media and entertainment sector decline was attributed to a $65 million later stage
investment in Foxyo2 Inc (Miami Dade) during 1Q 2013. Similarly, software sector growth was
positively impacted by a single transaction of $50 million in Kony Solutions Inc. (Orlando).
Transactions of this magnitude are rare in Florida, with only two transactions exceeding $40
million during the three years ending 2013.
At the national level, the most active industry sectors comparing 1H 2013 and 2014 were
retail/distribution (+414%), financial services (+400%), computer & peripherals (+256%),
software (+118%), industrial/energy (+110%), healthcare services (+110%), and business
products & services (+103%). The network & equipment (-65%) and telecommunications (-49%)
sectors were the only sectors that declined.
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Table 2. Comparison of 2013 & 2014 Florida Venture Capital Investment
By Industry Sector
($millions)
Six Months Ended June
Industry Sector
Biotechnology
Year Ended June
2013
$26.4
2014
$15.0
2013
$40.7
2014
$42.1
Business Products & Services
0.0
3.0
0.0
3.0
Computers and Peripherals
0.5
1.2
0.5
1.2
Consumer Products & Services
0.5
0.0
0.5
0.0
Electronics/Instrumentation
0.0
2.0
0.0
5.5
Financial Services
0.0
0.0
11.3
0.0
Healthcare Services
1.1
10.5
2.1
10.5
Industrial/Energy
5.3
39.2
9.9
55.6
IT Services
0.4
2.7
24.7
9.7
Media & Entertainment
72.0
0.0
72.0
1.4
Medical Devices & Equipment
11.4
0.0
16.4
41.1
Networking & Equipment
0.0
0.0
0.0
0.0
Other
0.0
0.0
0.0
0.0
Retailing/Distribution
0.0
1.5
0.0
1.5
Semiconductors
0.0
0.0
0.0
0.0
Software
53.5
109.8
60.1
250.5
Telecommunications
17.7
0.0
17.7
0.0
$189.0
$184.9
$255.9
$422.2
Total
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
Florida Investment Activity By Stage of Development
Seed capital investments at the State and national level accounted for .7 and 3 percent of
venture capital investments during the twelve months ending June 30 of 2014 respectively.
During the same period Florida investment activity was concentrated in later stage businesses,
accounting for 65 percent of total investments. Nationwide, investment activity was more
equally distributed between early, expansion, and later stage transactions.
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Table 3. Comparison of 2013 & 2014 Florida Venture Capital
Investments By Stage of Development
($millions)
Six Months Ended
June
Year Ended June
Stage
Seed
2013
$7.7
2014
$3.0
2013
$7.7
2014
$3.0
Early Stage
26.1
19.6
27.1
47.0
Expansion
67.1
62.2
82.4
98.9
Later Stage
88.0
100.0
138.6
273.3
$189.0
$184.9
$255.9
$422.2
Total
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
Investment Activity By Enterprise Florida Region
Around the State, 1H 2014 investment activity was strongest in the East Central and South
Florida regions with $76 million and $70 million respective venture capital investments. There
were five transactions in the Tampa Bay area valued at $37 million.
Table 4. 1H 2014 Venture Capital Investment By Enterprise Florida Region
($millions)
Region
Transactions
Dollars
East Central
6
$75.7
North Central
1
2.0
Southeast
13
70.4
Tampa Bay
5
36.7
Not Assigned
1
0
Total
26
$184.8
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
A map of the Enterprise Florida regions is available at the InternetCoast "Florida Innovation
Highlights" portal at icoast.com
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Investment Activity in South Florida
South Florida was the most active region, accounting for 13 of 25 transactions during the 1H
2014. The software sector accounted $32 million of investments from transactions. The
healthcare services and biotechnology sectors each had one transaction valued at $11 and $15
million respectively.
Table 5. 1H 2014 South Florida Venture Capital Investment
By Industry Sector
($millions)
Industry Sector
Biotechnology
Transactions
1
Dollars
$15.0
Business Products & Services
1
3.0
Computers & Peripherals
1
1.2
Healthcare Services
1
10.5
Industrial/Energy
1
5.0
IT Services
2
2.7
Retail/Distribution
1
1.5
Software
5
31.5
Total
13
$70.4
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
July 30, 2014
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FLORIDA VENTURE CAPITAL INVESTMENT HIGHLIGHTS - YTD JUNE 2014
Nine of 13 South Florida investments were in early stage and later stage businesses, accounting
for 94 percent of total venture capital investments in the region.
Table 6. 1H 2014 South Florida Venture Capital Investment
By Stage of Development
($millions)
Stage of Development
Startup/Seed
Transactions
1
Dollars
$3.0
Early Stage
4
16.2
Expansion
3
1.5
Later Stage
5
49.7
Total
13
$70.4
PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters
Florida Innovation Highlights is the property of Cherrystone Management Consultants Inc. It is being posted on the
InternetCoast website as a resource to achieve InternetCoast's mission to "Be a proactive forum and catalyst to
stimulate collaboration between leaders in business, government, communities, academia, and research to
position South Florida as one of the world's top innovation regions."
About InternetCoast
InternetCoast was founded in 1999 as a non-partisan, not-for-profit 501(c)3 organization. Its mission is to be a
proactive forum and catalyst to stimulate collaboration between leaders in business, government, communities,
academia, and research to position South Florida as one of the world's top innovation regions.
About Cherrystone Management Consultants
Cherrystone provides strategic consulting services, specializing in business development; development of
innovative joint ventures and partnerships; creating product and service distribution channels; corporate finance;
and transformational leadership. For more information contact Dale Gregory, Executive Vice President at 561 212
8385 or [email protected].
July 30, 2014
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