After such a bonanza year for VC-backed M&A in 2014, it’s no surprise that deal activity declined.
But the first quarter was truly very slow.
In Q1, 83 venture-backed M&A deals were done, 17 of which had an aggregate deal value of $2.44 billion, according to a VCJ analysis of Thomson Reuters data. It was the lowest quarter in terms of disclosed deal value since the first quarter of 2013, according to an Exit Poll report by Thomson Reuters and the National Venture Capital Association (NVCA).
In comparison, the first quarter of 2014 saw 109 VC-backed M&A deals take place, including 29 with disclosed deal valuations that combined totaled $7.7 billion. Last year’s comparative first quarter, however, included Google’s $3.2 billion acquisition of Nest and VMware’s $1.54 billion purchase of Air Watch. Throughout 2014, which also included Facebook scooping up WhatsApp for near $21 billion, 479 VC-backed deals were completed, including 139 with disclosed values for a staggering total of $47.6 billion.
“With such a blistering pace for venture-backed exit activity in 2014, it was only a matter of time before we saw a drop in activity,” said Bobby Franklin, president and CEO of the NVCA.
During the first quarter this year, the top two deals were acquired for the same amount. U.K.-based BTG purchased Mountain View, Calif.-based medical device maker Pneumrx Inc for $475 million. The company had raised $63 million in venture funding from several firms, including Adams Street Partners, Alta Partners, Endeavour Vision SA, Forbion Capital Partners, Gold Hill Capital Management, KBL Healthcare Ventures, KD Ventures, Spray Venture Partners and Telegraph Hill Partners, among others, according to Thomson Reuters.
Under Armour also spent $475 million to acquire health-monitoring app developer Myfitnesspal Inc. The San Francisco-based company had previously raised $18.16 million from Accel Partners and Kleiner Perkins Caufield & Byers.