20170117-高盛-Views_from_the_Valley_–_the_unicorn_year_in_review__Fewer_new_unicorns__successful_IPOs_16页_199kb

Summary of "Americas: Technology" Document

Core Content

This document provides an in-depth review of venture capital (VC) investment trends in the Americas, with a focus on the technology sector, particularly in the areas of unicorn startups, IPO performance, and funding in virtual reality (VR)/augmented reality (AR) companies. The analysis is based on data from PitchBook, Dow Jones VentureSource, and The Wall Street Journal, covering the fourth quarter of 2016.

Main Points

1. US VC Funding Trends

• Total Investment: $12.9 billion in 4Q16, representing a 17% quarter-over-quarter (qoq) decline and a 28% year-over-year (yoy) decline.
• Deal Size: The second consecutive quarter without a deal size of at least $500 million. This contrasts with the previous nine quarters, which had at least one $500 million round, and eight of those had at least one $1 billion round.
• Average Deal Size: Remained robust at $6.4 million, the highest since 2011.
• Sector Funding: 43% of total funding in 4Q16 went to the software category, up from 37% in 3Q16.

2. Unicorn Additions and IPO Performance

• New Unicorns: Only 6 new unicorns were added in 4Q16, a significant drop from the average of 12 per quarter since 2014. Total unicorns in 2016 were 24, compared to 76 in 2015.
• IPO Performance: Four unicorns went public in 2016, with their current market caps averaging 120% higher than their most recent private valuations and 70% higher than their exit valuations.
• Unicorn Club: The WSJ Billion Dollar Startup Club had 154 members as of December 31, 2016, with a total value of $599 billion, up 3% from $581 billion in September 2016.

3. VR/AR Funding

• Investment Volume: Over $300 million was invested in 76 VR/AR deals in 4Q16.
• Notable Deals:
  • $58 million for Osterhout Design Group (ODG) to develop AR glasses.
  • $22 million for High Fidelity for virtual world development.
  • $8 million for IrisVR to convert 3D files into VR.
  • $5 million for STRIVR Labs to expand VR training platforms.
• Fox's Involvement: Fox remained an active investor in the VR/AR space, leading investments in ODG and participating in a $25 million series B round for Baobab.

4. Funding by Series

• Top Funding Rounds:
  • Series A: Heal ($40M), Zift ($27M), AdvisorEngine ($20M), Dataiku ($14M), DiCentral ($15M).
  • Series B: Wavefront ($52M), Conversica ($34M), Lemonade ($33M), EverQuote ($23M), Helpshift ($23M).
  • Series C: OfferUp ($130M), Memebox ($126M), Stripe ($150M), etc.
  • Series D: Opendoor ($210M), etc.
  • Series E and beyond: Payoneer ($180M), etc.

5. Exit Trends

• Exits from the Club: 14 exits since January 2014, with 2 in 4Q16.
  • Coupa Software: Pursued an IPO in October 2016, priced in line with its private valuation.
  • Kabam: Sold its studio for ~700-800 million, below its private valuation.
• Exit Performance: M&A exits outpaced IPOs in 2016, but unicorn IPOs were well received, with significant market cap growth post-IPO.

Key Information

• The number of new unicorns in 2016 was significantly lower than in 2015, indicating a slowdown in the unicorn creation pace.
• The average deal size remained high despite the lack of mega-deals, suggesting a more diversified funding environment.
• Unicorn IPOs in 2016 saw strong market performance, with average market caps increasing by 120% over private valuations and 70% over exit valuations.
• VR/AR investments remained substantial, with notable activity and continued interest from investors like Fox.
• The document also includes a list of companies that exited the Club, highlighting both IPOs and acquisitions, with some experiencing market cap declines post-exit.

Additional Information

• The report includes several exhibits and tables detailing investment breakdowns, unicorn additions, and exit trends.
• The authors note that private valuations may not always align with public equity valuations, and that the funding environment is influenced by broader market dynamics.
• Goldman Sachs provides investment context and proprietary data tools like Quantum and GS SUSTAIN for analysis.

Conclusion

The document highlights a shift in the VC investment landscape in the Americas, with fewer new unicorns and a more balanced funding environment. Despite the decline in large deals, the average deal size remained strong, and unicorn IPOs were well received, suggesting continued investor confidence in the tech sector. The VR/AR space remained a key area of investment, with ongoing activity and strategic participation from major investors.