Financing & Performance Trends – October 2014

2

Early-Stage funding in tech companies skyrocketed to a two-year high in October 2014, up 56% over the same month last year on a funding basis.

3

$728

$609 $530

$618

$751

$613 $651 $623

$772 $825

$683 $748

$798 $889

$622

$931

$730

$1,014

$829

$1,182 $1,152

$881 $978

$1,023

$1,247

421

331 306

394

343

382 363

394 392

478

412

449 454

383

345

438

410

366

398 385

363 375

407

375

[VALUE]

Early-Stage Tech Investment Deals and Dollars October 2012 - October 2014

Investment Dollars ($M) Deals

Silicon Valley continues to account for about 1/3 of all early-stage tech deals in the US, as most regions remained range-bound.

4

US Early-Stage Tech Investment by Region As % of Deals

34%

13% 14%

38%

October 2013

34%

15% 17%

34%

October 2014

30%

16% 21%

33%

October 2012

Early-stage tech funding share to Silicon Valley startups jumped drastically to 52% in October 2014 versus the same month a year prior, with the 3 largest US Deals all going to companies based in Silicon Valley.

5

US Early-Stage Tech Investment by Region As % of Funding

25%

10%

13%

52%

October 2014

35%

12% 14%

39%

October 2013

38%

12% 20%

31%

October 2012

October held September’s median deal size high across all early-stage tech at $2M, while average deal size increased to $3.42M, just off the highs seen in June 2014 of $3.65M.

6

0.91 1 1

0.78

1

0.75

1 1 1 1 1 1

1.36 1.35 1.3

1 1.1

1.5 1.39 1.4

1.5 1.36 1.37

2 2 1.96

2.22 2.14

1.89

2.60

1.89

2.22 2.09

2.35

2.06 2.14

1.95

2.33

2.81

2.35

2.71

2.29

3.25

2.61

3.57 3.65

2.75 2.89

3.38 3.42

Early Stage Tech Deal Size Trend $M, October 2012 - October 2014

Median of Deal Size Mean of Deal Size

Peeling back the early stage activity, Angel deals dropped from recent high as October saw the median deal size come in at $0.7M. The average deal size fell to $1.71M, despite multiple $5M+ angel rounds.

7

0.93

0.75 0.65

0.53 0.51 0.53 0.52

0.91

0.65 0.75

0.54

0.67 0.7

0.58

0.7

1

0.815

1.13 1.09

0.73 0.84

1 1 1

0.7

1.06

1.47

0.95 0.95

0.77

1.60

1.11 1.22

1.09 1.15 1.16

1.40

0.98

2.30

1.21

1.97

1.55 1.54

1.92

1.01

1.33

1.19

1.47

2.25

1.71

Angel Tech Deal Size Trend $M, October 2012 - October 2014

Median of Deal Size Mean of Deal Size

While average seed rounds to tech startups reached their highest total over the past two years, median round size fell off September’s two-year high as the median seed round was $1.02M in October 2014. Overall, seed deals have been steadily climbing over time.

8

0.48

0.67 0.7

0.23

0.56

0.48

0.65

0.5

0.38

0.7

0.6 0.56

1

0.8 0.82

0.5

0.73

0.65

0.75

0.97

0.83 0.83

0.7

1.25

1.02

0.73

0.84

1.03

0.59

0.91

0.68

0.84

0.71 0.76

1.02

0.81 0.78

1.17

1.02

1.10

0.85 0.89

0.86

1.01 1.04

1.21

1.01 0.94

1.34 1.39

Seed Tech Deal Size Trend $M, October 2012 - October 2014

Median of Deal Size Mean of Deal Size

Series A median deal size stayed at $5M in October, after a 25% increase in deal size in August. Multiple $20M+ Series A deals, propelled average deal size to $6.76M. This was still considerably lower than their May 2014 highs, a month which saw Takelot Online, Oscar Health, and Mozido all raise $80M+ Series A rounds, driving the average round size to $8.21M.

9

3.23 3.3 3

3.37 3

3.2 3.4

3.2

4

3.4

4.2

3

4 4 4

3.35

3.8

5 5

4

5.6

4.72

4

5 5

5.02 5.14 4.89 4.91

6.91

4.72 4.85 4.69

5.99

4.10

5.91

4.34

4.77

5.35

4.94

6.96

5.11

6.43

5.29

8.21 7.91

6.52 6.50 6.22

6.76

Series A Tech Deal Size Trend $M, October 2012 - October 2014

Median of Deal Size Mean of Deal Size

Internet startups made up 66% of all early-stage tech deals in October 2014, only slightly off of a 2013 high of 71%. Mobile is the other big winner in tech with other areas (computer hardware, chips & semis (electronics) and software) making up less than 15% of deals.

10

67% 65% 59%

65% 67% 70% 71% 71% 68% 64% 64% 65% 65% 59%

65% 67% 70% 63% 67% 64% 62% 61% 62% 65% 66%

26% 25%

29%

25% 21% 21% 22% 22%

23% 25% 26% 27% 25%

32% 26% 24%

23% 28%

24% 28% 25%

30% 26% 25% 25%

4% 4% 6% 4% 6% 5% 2% 4% 5% 5% 5% 5% 5% 3% 5% 4%

4% 5% 4% 5% 6%

6% 5%

7% 5% 2% 4% 4% 3% 3% 2% 2% 2% 2% 3% 3% 3% 2% 3% 3% 2%

2% 3% 3% 2% 4%

2% 4%

1% 2% 2% 2% 3% 2% 2% 3% 3% 1% 2% 2% 2% 1% 2% 3% 2% 4% 1% 1% 2% 1% 3% 1% 3% 1% 2%

Early Stage Tech Investments by Sector As % of Deals, October 2012 - October 2014

Internet Mobile & Telecommunications Software (non-internet/mobile) Computer Hardware & Services Electronics

Four of the top five deals in October, totaling over $150M, went to internet companies, driving the 69% dollar share and subsequently leading to a halving of dollar share to software companies from 8% in September to 4% in October.

11

72%

57% 57% 61% 51%

72% 70% 68%

50% 60%

71% 63%

56% 54%

68% 74%

64% 63% 64% 60%

54% 62% 63% 66% 69%

19%

22% 26% 23% 38%

18% 20% 24%

36%

26% 14% 29%

29% 32%

24% 14% 24% 27% 22% 29%

23%

28% 24% 23%

22%

3%

4%

7% 8% 5% 6% 2% 2%

6% 4% 6%

5%

7% 7% 3%

4% 9% 4% 7% 5%

6%

7% 5%

8% 4% 4%

14% 7% 5% 4% 5% 5% 6% 6% 9%

3% 6% 4%

4% 4%

2% 6% 6% 5%

7%

2% 5%

2% 2% 2% 4% 3% 3% 2% 4% 3% 2% 1% 4% 1% 1% 3% 3% 4% 1% 1% 1%

10% 2% 1% 3%

Early Stage Tech Investments by Sector As % of Dollars, October 2012 - October 2014

Internet Mobile & Telecommunications Software (non-internet/mobile) Computer Hardware & Services Electronics

Seed stage companies hit a six-month low at 52% in October, but accounted for over half of all early-stage tech deals yet again. All other stages were relatively range-bound.

12

11% 17% 19%

15% 12% 18% 16% 13% 11% 15% 15%

7% 12% 11% 15% 12% 13% 13% 14% 14%

18% 12% 12% 10% 12%

63% 56% 53% 58% 63%

58% 54% 59% 61% 54%

61%

63% 59%

53%

56% 61% 60% 51%

54% 53% 48% 57% 57% 53% 52%

26% 27% 27% 27% 25% 25% 30% 28% 27% 31%

24% 30% 30%

36% 29% 27% 27%

36% 32% 33% 34% 31% 32% 37% 36%

Early Stage Tech Investments by Stage As % of Deals, October 2012 - October 2014

Angel Seed Series A

Four early-stage tech companies raised $15M+ rounds in October 2014, including stealth startup Enjoy Technology, Our Film Festival, Helium Systems, and Segment.io.

13

Rank Company Sub-Industry Amount ($M)

1 Enjoy Technology Stealth Mode 30.0

2 Our Film Festival Video 18.1

3 Helium Systems Wireless Telecom Equipment 16.0

4 Segment.io BI, Analytics & Perf Mgmt 15.0

5 Bitnet Technologies Payments 14.5

6 Vixlet Social 14.2

7 InSilixa Semiconductors 13.0

7 Thync Healthcare 13.0

9 Orchard Platform BI, Analytics & Perf Mgmt 12.0

9 Comply365 Collaboration & Project Management 12.0

9 Tangible Play Gaming 12.0

Largest US Angel - Series A Tech Deals, October 2014

www.cbinsights.com

Germany-based High-Tech Gruenderfonds was the most active early-stage VC in October, investing in over 6 companies. 500 Startups came in second while multiple firms tied for third.

14

Rank Investor

1 High-Tech Gruenderfonds

2 500 Startups

3 Andreessen Horowitz

3 Upfront Ventures

3 SV Angel

3 Khosla Ventures

7 Bitcoin Opportunity Corp.

7 Rothenberg Ventures

7 Point Nine Capital

7 Google Ventures

7 ENIAC Ventures

7 Accel Partners

7 Intel Capital

7 Middle East Venture Partners

Most Active Early-Stage Tech VCs, October 2014

15

-100% -50% 0% 50% 100% 150% 200%

Sports

Content Management

Food & Grocery

Apparel & Accessories

Travel

Business Intelligence, Analytics & Performance Mgmt

Accounting & Finance

Asset & Financial Management & Trading

Data & Document Management

Video

Education & Training

Gaming

News & Discussion

Customer Relationship Management

Social

Marketplace

Collaboration & Project Management

Application & Data Integration

Health & Wellness

Healthcare

Advertising, Sales & Marketing

Auto

Real Estate

Payments

Information Providers & Portals

Monitoring & Security

Comparison Shopping

Music

HR & Workforce Management

Conferencing & Communication

Supply Chain & Logistics

Top Early-Stage Tech Sub-Industries by Deal Growth Rate October 2013 vs. October 2014

Supply chain & logistics startups saw the largest deal growth of any tech sub-industry in October 2014 versus the same month a year prior, while sports tech companies saw a 70% drop-off from over 10 deals to less than 5 in October 2014.

16

We used performance metrics to create momentum scores for both Facebook (Likes growth) and Twitter (Mention growth) for the companies funded in October 2014. To be included in each list, the company had to have over 100 likes in the previous month and 25 or more twitter mentions. Below are the 6-20 ranked companies. The full top 20 is available to CB Insights customers.

17

Early-Stage Tech Companies by Twitter Mention

Growth - Oct 2014

Rank Company

1 Login to CB Insights

2 Login to CB Insights

3 Login to CB Insights

4 Login to CB Insights

5 Login to CB Insights

6 UniPlaces

7 Loopd

8 MOVE Guides

9 Cratejoy

10 Reelio

11 BrightFunnel

12 Shiphawk

13 Appsee

14 Oneflare

15 BloomNation

16 Nepris

17 Iversity

18 GovX

19 ZenMate

20 Hello Doctor

Early-Stage Tech Companies by Facebook Likes

Growth - Oct 2014

Rank Company

1 Login to CB Insights

2 Login to CB Insights

3 Login to CB Insights

4 Login to CB Insights

5 Login to CB Insights

6 Ffrees Family Finance

7 Lesara

8 ecoVent Systems

9 ShipHawk

10 Kidizen

11 Tyffon

12 Thync

13 Insightpool

14 Coinplug

15 Strax

16 Jukely

17 PrivateGriffe

18 Crowdfunder

19 Justworks

20 Fleksy

We also tracked overall news mentions as well as web traffic metrics (pageviews, reach, rank) for early-stage tech companies that received financing in October 2014. Below are the 6-20 ranked companies in each metric. The full top 20 is available to CB Insights customers on the Research tab.

18

Early-Stage Tech Companies by Web Traffic -

Oct 2014

Rank Company

1 Login to CB Insights

2 Login to CB Insights

3 Login to CB Insights

4 Login to CB Insights

5 Login to CB Insights

6 Blockchain

7 15Five

8 Front

9 BuildZoom

10 StandFirm

11 Segment.io

12 Crowdfunder

13 ZoomCar India

14 Fashion Project

15 Testbook

16 BigFoot Retail Solutions

17 Iversity

18 Lever

19 InvoiceASAP

20 Fedora

Early-Stage Tech Companies by News Mentions -

Oct 2014

Rank Company

1 Login to CB Insights

2 Login to CB Insights

3 Login to CB Insights

4 Login to CB Insights

5 Login to CB Insights

6 Poynt Corporation

7 Thync

7 Blockchain

9 Stratos

10 Cazena

10 Cohealo

10 Avaamo

10 Navdy

14 StackEngine

14 Lytics

16 Blendle

17 BloomNation

17 uBeam

17 Wysada

20 Fleksy

19

We encourage you to review the methodology and definitions employed by us to better understand the numbers presented in this report. If you have any questions about our definitions or methodological principles, we encourage you to reach out to us directly.

What is included? • Early-Stage (Angel – Series A) Equity financings into emerging

companies. • Fundings of only private companies. Public companies of any kind

on any exchange (including Pink Sheets) are excluded from our numbers even if they received investment by a venture firm(s)

• Only include the investment made in the month for tranched investments. If a company does a second closing of its Series A round for $5M and previously had closed $2M in a prior quarter, only the $5M is reflected in our results.

• Round #s reflect what has closed –not what is intended. If a company indicates the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount which has closed.

• Only verifiable fundings are included. Fundings are verified via (1) various federal & state regulatory filings (2) direct confirmation with firm or investor or (3) press release.

• Funding close date matters. Fundings are provided based on funding close date and not on announcement date.

What is not? • No contingent funding. If a company receives a commitment for $20M subject to

hitting certain milestones but first gets $8M, only the $8M is included in our data. • No business development/R&D arrangements whether transferable into equity

now, later or never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity financing nor is it from venture capital firms. As a result, it is not included.

• Buyouts, Consolidations and Recapitalizations. All three of these of transaction types are commonly employed by private equity firms and are tracked by CB Insights. However, they are excluded for the purposes of this report. Private equity investments into companies which may have received venture capital investment prior are also not included.

• Private placements. These investments also known as PIPEs (Private Investment in Public Equities) even if made by a venture capital firm(s) are not included.

• Debt/loans of any kind. Venture debt or any kind of debt/loan issued to emerging, startup companies even if included as an additional part of an equity financing is not included. If a company receives $3M with $2M from venture investors and $1M in debt, only the $2M is included in these statistics.

• Government funding. Grants, loans, equity financings by the federal government, state agencies or public -private partnerships.

20

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