Northwest sees fewer venture deals in 2014 but greater investments in dollars.

Here’s the press release:

SEATTLE, January 16, 2015 Venture capitalists invested $48.3 billion in 4,356 deals in 2014, an increase of 61 percent in dollars and a 4 percent increase in deals over the prior year, according to the MoneyTreeTM Report by PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. In Q4 2014, $14.8 billion went into 1,109 deals.

Internet-specific companies captured $11.9 billion in 2014, marking the highest level of Internet-specific investments since 2000. Additionally, annual investments into the Software industry also reached the highest level since 2000 with $19.8 billion flowing into 1,799 deals in 2014. Dollars going into Software companies accounted for 41 percent of total venture capital investments in 2014, the highest percentage since the inception of the MoneyTree Report in 1995.

“2014 has been an exciting year for venture capital investing,” noted Mark McCaffrey, global software leader and technology partner at PwC. “For the first time in MoneyTree history, we saw two deals exceed one billion dollars and more than 40 megadeals which are investments exceeding $100 million. In addition, theres been an influx of private equity investors at a level weve not seen previously. As a result, entrepreneurial companies are capable of disrupting entire industries and leveraging investment dollars to expand to the global markets. With the continued economic conditions, we would expect venture capital investing to be positioned to continue strong levels of investing in 2015.”

“With the fundraising environment improving in 2014 and non-traditional investors increasingly joining venture capital firms in later-stage funding rounds, more capital was deployed to the startup ecosystem in 2014 than any year since 2000,” said Bobby Franklin, President and CEO of NVCA. “As the epicenter for technological innovation, the United States has a wealth of

groundbreaking startup companies that require the financial capital and business expertise of venture investors to take their businesses to the next level. Whether it be a medical device company whose products will save thousands of lives or the software company whose services will transform an entire industry, the venture community is investing in the future of our economy.”

In the Pacific Northwest region, 45 companies received over $520 million in funding during the fourth quarter of 2014. This represented a 92% increase in funding from Q3 and a 3% from Q4 of 2013, a traditionally large quarter. The majority of that funding occurred in Washington where 32 companies received over $464 million, representing a 87% increase from the previous quarter. The region ended up with a 34% increase in funding in 2014 in contrast with 2013, but a 13% decrease in the number of deals.

Sector and Industry Analysis

The Software industry maintained its status as the single largest investment sector for the year, with dollars rising 77 percent over 2013 to $19.8 billion, which was invested into 1,799 deals, a 10 percent rise in volume over the prior year. Software remained the number one sector in Q4 for both dollars invested and number of deals with $5.8 billion going into 461 deals, nearly four times the number of deals than the second highest volume sector, Media and Entertainment. Software has held the number one spot in terms of dollars invested for 21 straight quarters.

Biotechnology investment dollars rose 29 percent while volume decreased 4 percent in 2014 to $6.0 billion going into 470 deals, placing it as the second largest investment sector for the year in terms of dollars invested. The Media and Entertainment sector accounted for the second largest number of deals in 2014 at 481, however it was third largest in terms of dollars invested with an annual total of $5.7 billion.

Overall, investments in 2014 in the Life Sciences sector (Biotechnology and Medical Devices combined) rose to the highest level since 2008 with $8.6 billion invested into 789 deals, a 29 percent increase in dollars but a 3 percent drop in deals compared 2013. In Q4, the Life Sciences sector captured $2.8 billion going into 202 deals, a 62 percent increase in dollars invested while deal volume remained relatively flat compared to Q3 2014. Dollars invested into Life Sciences companies accounted for 18 percent of total venture capital investments in 2014.

Internet-specific companies experienced a 68 percent increase in dollars but a 6 percent drop in deals for the full year 2014 with $11.9 billion going into 1,005 rounds compared to 2013 when

$7.1 billion went into 1,074 deals. This marked the highest level of Internet-specific investment since 2000. For the fourth quarter, $3.0 billion went into 236 Internet-specific deals. Internet-specific is a discrete classification assigned to a company whose business model is fundamentally dependent on the Internet, regardless of the companys primary industry category. These companies accounted for 25 percent of all venture capital dollars in 2014.

Fourteen of the 17 industry categories experienced increases in dollars invested for the year. Industry sectors experiencing some of the biggest dollar increases for 2014 included: Retailing/Distribution (265 percent); Computers and Peripherals (132 percent); Electronics/Instrumentation (128 percent); and Financial Services (109 percent).