What a way to usher in a new fiscal year -- the first quarter of 2014 saw venture capital investment at its highest level since the first quarter of 2001, and mergers and acquisitions at their highest quarterly figure since the third quarter of 2000, according to a Dow Jones VentureSource report.
Median pre-money valuations also increased, up 59 percent from the fourth quarter of 2013, and though the amount of initial public offering capital registered dropped 17 percent from the fourth quarter of 2013, the number of IPO deals increased by 90 percent.
On a local level, equity financings for venture-backed companies in the San Diego metro area increased from $187.85 million last quarter to $204.29 million in the first quarter of 2014, up from $176.63 million year-over-year.
The Los Angeles metro saw a slight decline, from $235.15 million in the fourth quarter to $206.70 million, down from $257.31 million in the first quarter of 2013. In Orange County, investment increased to $188.15 million in the first quarter of 2014 from $121.56 million in the fourth quarter of 2013, up from $119.73 million year-over-year.
Nationally, 73 funds garnered $9.6 billion in the first quarter of 2014, more than doubling the amount raised in the previous quarter, while the number of funds remained stable. The median U.S. fund size was $175 million. Companies raised $10.7 billion from 862 venture capital deals this quarter, an 18 percent increase in capital and a 10 percent decrease in the number of deals from the previous, but a 44 percent investment increase and 3 percent decline in the number of deals year-over-year.
The most active sectors were information technology, claiming 32 percent of the total amount invested, and financial services with 25 percent of the pie.
By region, Southern California had the fourth most number of deals at 73, behind Northern California with 321, the Mid-Atlantic with 166 and New England with 80. Southern California also came in fourth in terms of amount raised with $670 million. Northern California raised $5.68 billion, the mid-Atlantic raised $1.28 billion and New England stands at $1.26 billion.
Breaking those numbers down further, San Diego claims the number seven spot for deals by subregion with 20, and the number six slot based on money raised with $200 million. The San Francisco Bay area tops both lists, followed by, in terms of deals, the New York metro, Boston metro, Potomac, Los Angeles metro and Seattle metro. For amount raised, the Boston metro claims the number two spot, followed by the New York metro, and then the Los Angeles and Austin metros both with $210 million.
Mergers and acquisitions of venture-backed companies decreased by 2 percent in number of deals but increased 37 percent in amount raised from the fourth quarter of 2013, with 119 deals garnering $17 billion in the first quarter of 2014, the highest quarterly figure since the third quarter of 2000, when $23 billion was raised.
Thirty-eight venture-backed IPOs took place during the first quarter, the highest figure in a quarter since the third quarter of 2000 when 75 were completed, representing an increase of 90 percent from the previous quarter. $2.8 billion was raised in these deals, a 17 percent decrease from the fourth quarter of 2013.