M&A Dips in Q2 But IPO, VC Funding Jumps
Merger and acquisition activity for VC-backed startups dipped in Q2 2015, after record breaking quarters, while both IPO activity and venture funding for startups jumped, according to Dow Jones VentureSource.
Acquisitions of venture backed companies in the U.S. were 86 deals, down 26.5% from 117 deals in Q1 2015 and down 30.1% from 123 in the year-ago period.
By dollar value, M&A dropped to $9.48 billion, down 16.1% from $11.3 billion in Q1 2015 and down 16.8% from $11.14 billion in the year-ago period.
The second quarter was led by LinkedIn’s acquisition of educational video startup Lynda.com for $1.5 billion.
While M&A activity was down, initial public offerings were spiked to 27 IPOs, which raised $2.5 billion in Q2 2015. Deal volume increased 125% from Q1 2015, while capital raised almost tripled from $912 million. IPO activity in Q2 2015 was up 12.5% from 24 IPO deals in Q2 2014, while dollars raised were up 29.1%.
The largest IPO of Q2 2015 was health device outfit FitBit, which raised $732 million in its offering.
Meanwhile, venture capital fundraising spiked, with 86 funds raising $12.9 billion in Q2 2015, which was up 51% by dollars raised and 23% by number of funds from Q1 2015.
Venture investing in companies also continued to increase, with 1,034 deals totaling $19 billion in Q2 2015. That was up 12% by number of deals from Q1 2015 and 15% by dollars raised. VC investing compared to the year-ago quarter was up 24% by dollars and down marginally by number of deals.