Report: 2014 Best VC Fundraising Year Since 2007
Internet pioneer Marc Andreessen, right, makes a point at the Open Compute Summit while Arista Network chairman Andy Bechtolsheim listens. (Photo: Colleen Miller)

Report: 2014 Best VC Fundraising Year Since 2007

US venture capital firms raised $29.8 billion during the year, signaling strong rate of successful exits

Last year was the strongest fundraising year U.S. venture capital investors have seen since 2007, indicating that many VC-backed companies have been making successful exits in recent years.

Together, VCs raised $29.8 billion in 2014, a 69 percent improvement over 2013, according to a joint report by Thomson Reuters and the National Venture Capital Association. With 254 funds raised, the year was also the busiest for U.S. VC fundraising since 2001.

In a statement, Bobby Franklin, president and CEO of NVCA, said fundraising levels were starting to catch up with the level of investment of the last few quarters. “As a result of the strong exit market for venture-backed companies over the last couple of years, more money is being distributed back to investors who have chosen to redeploy that capital to the venture ecosystem,” he said.

Menlo Park, California-based VC firm Andreessen Horowitz raised the largest fund of the year: $1.7 billion. The firm invests in both consumer and enterprise technology startups.

Its enterprise portfolio includes numerous startups in the data center products and services space. These include Cumulus Networks, which has a Linux OS for bare metal network switches, DataGravity, a data-aware storage vendor, DigitalOcean, an Infrastructure-as-a-Service provider popular with developers, Mesosphere, a startup whose “data center OS” software simplifies management of disparate IT resources, and many more.

Andreessen Horowitz led a $10 million Series A round for Mesosphere in June.

Last year was a strong VC funding year for startups in the enterprise IT space, especially companies doing work in IT automation, big data, databases, OpenStack clouds, and application containers.

Docker, the leading app container startup, raised $40 million in a Series C round led by Sequoia Capital. A company called Stratoscale raised $32 million for its IT automation software that supports Docker and OpenStack.

Mirantis, one of the biggest OpenStack distribution providers, raised $100 million in a Series B led by Insight Venture Partners. A smaller company, Metacloud, which provides both on-premise and hosted OpenStack private clouds, raised $15 million.

DevOps-style IT automation software company Puppet Labs took in $40 million in additional venture capital. Its smaller rival, Moogsoft, raised $11.3 million.

It was a big year for fundraising for major players in the open source NoSQL database space. DataStax, a Cassandra startup, raised $106 million. Another NoSQL heavyweight Couchbase raked in a $60 million round.

Many more companies that deal in intelligent storage management, big data analytics, data warehousing, and cloud management announced new VC funding in 2014.

The year saw 48 follow-on VC funds and 27 new funds raised, according to the Thomson Reuters and NVCA report. The largest new fund raised in the fourth quarter was from San Francisco-based Presidio Partners 2014. The firm’s inaugural fund raised $140.4 million.

TAGS: Investing
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