US start-ups raise $9.99 billion, hit outsized valuations in first-quarter

Venture capital funding for US start-ups hit its highest mark since 2001 during the first three months of the year and 11 companies were valued at $1 billion or more, underscoring the increasingly pricey environment for entrepreneurs, according to a report on Thursday from consultancy CB Insights, San Francisco CA.

Venture capitalists invested $9.99 billion across 880 deals in the first quarter of 2014. The dollar amount jumped by 44 percent compared with the same quarter in 2013, while the number of deals rose by 5 percent.

The large number of companies that won funding last quarter with billion dollar valuations is the same as for all of 2013. The year before, just eight companies were funded at valuations of $1 billion or more. The valuation is the amount the investors think the company is worth, with their dollar investment representing a fraction of that.

The technology companies that venture capitalists valued at over $1 billion last quarter include payments company Stripe, online home-furnishings company Wayfair and enterprise-data management company Cloudera.

About 10 percent of the deals, by volume, were late stage, meaning a fifth funding round or later, fitting with the tendency of many venture-backed companies to delay initial public offerings.

Firms jumping into the most deals included 500 Startups, Kleiner Perkins Caufield & Byers and New Enterprise Associates, which each participated in 30 or more deals in the quarter.

Healthcare startups dominated the venture-backed IPO market, and more venture-backed companies held IPOs than in any quarter since 2000, as previously reported.

The CB Insights report (click http://www.cbinsights.com/blog/trends/venture-capital-funding-exits-q1-2014) tracks deals only if venture capitalists were involved in the funding rounds, it said.