More confusion in venture stats

Matt Bowman · December 4, 2009 · Short URL: https://vator.tv/n/c33

DowJones, the NVCA and VentureDeal disagree on Q3 venture financing trend. 17% up or 13% down?

At the end of Q3, Dow Jones and the NVCA came out with conflicting stats, the former saying U.S. venture financings increased in Q3 by 17%, the latter reporting a 6% decline.

On Thursday, VentureDeal posted its own analysis, reporting a 13% decline in U.S. venture financing.

I was going to write a story on the rebound of digital media based on the VentureDeal numbers (the report says the sector reversed a Q2 decline), but with such disparate numbers, pulling a trend for the sake of a headline seems irresponsible.

The VentureDeal report is based on a smaller slice of the pie—it cites $1.3 billion raised by 229 companies in Q3. Dow Jones had $5.1 billion invested in 616 deals and NVCA had $4.8 billion invested in 637 deals.

VentureDeal is a great source for searching data on a given investment. I worked with Don Jones to get lots of data for the AlwaysOn VC 100 and found the database useful, and Don is a great guy to boot, but I’m not sure I’d use these numbers for a broad trend analysis.

From the report:

Summary

During the third quarter of 2009, 229 companies raised $1.3 billion in venture capital funding in the aggregate, 13% in total funding amount versus Q2 O9 and down 4% in the number of companies funded.

By sector, only the Digital Media and Software sectors showed a gain in funding amounts, with the Internet and eCommerce sectors showing significant declines in the amounts funded.

Digital Media

Digital Media funding reversed its previous quarterly decline by showing significant increases in both total amounts funded and the number of companies funded. Digital Media companies for the purposes of VentureDeal's definition are generally either video/casual game producers or advertising networks. Total funding increased by 15% to $146 million, with 29 companies being funded, an increase of 21% versus the previous quarter.

Tremor Media received the largest funding, raising $20 million in a round of strategic financing from SAP Ventures. Tremor provides advertisers with in-banner and in-stream video advertising services via a network of publisher sites.

MediaMath secured $12.5 million in equity and debt, from corporate strategic investor Safeguard Scientifics and other investors. The company said it would use the funding proceeds to geographically expand via organic growth and tactical acquisitions as well as continue product development and executive recruitment.

ProtonMedia garnered $2.5 million for its series A round of equity financing. Proton produces 3D virtual worlds and corporate training and development software for the pharmaceutical and energy sectors, among others.