Startup Funding Shows Signs of New Tech Bubble
Over the past few days two venture capitalists in the United States have expressed their worries about the current state of the US startup community. In essence, both are saying that startups are burning through too much cash and that the overall amount of risk currently taken on in Silicon Valley is excessive. It’s not the first time people have warned about a new tech bubble, but are the concerns justified?
A look at the data seems to suggest so: according to Thomson Reuter data published by PricewaterhouseCoopers, venture capital funding in the U.S. amounted to $12.97 billion in Q2 2014, which is by far the highest level it’s been at since Q1 2001. Compared to the second quarter of last year, VC funding jumped 81% in Q2, representing the highest year-over-year increase since Q3 2000 when VC funding reached its historical peak. Interestingly the number of VC deals hasn’t increased as much as the total amount that was invested, indicating that the average value per deal must have increased. And indeed it has: at $11.64 million the average value per deal was as high in Q2 2014 as it’s last been in Q4 2000.
While these numbers do not necessarily mean that we’re in a new dot-com bubble, they make one thing perfectly clear: the period of prudence that followed the financial crisis of 2009 is officially over.
- European venture capital investments as of 2013 and 2014, by countryEuropean venture capital investments as of 2013 and 2014, by country
- Venture capital funds raised by European companies 2007-2015Venture capital funds raised by European companies 2007-2015
- Venture capital fund numbers in Europe in 2015, by investment focusVenture capital fund numbers in Europe in 2015, by investment focus
- Top medtech mergers and acquisitions by value 2014-2015Top medtech mergers and acquisitions by value 2014-2015
- Most funded Kickstarter projects 2016Most funded Kickstarter projects 2016
- Alternative finance market size in Europe 2012-2015Alternative finance market size in Europe 2012-2015
- Ranking of highest valued startup companies worldwide, August 2016Ranking of highest valued startup companies worldwide, August 2016
- Kickstarter: total amount of funding pledged 2012-2016Kickstarter: total amount of funding pledged 2012-2016
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