Darrell Hudson

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VC Funding of Social Media Companies Soars to $819 Million in the Fourth Quarter

In the following pages, we detail the data behind the charts above. Once again, we look forward to hearing from the community to help us make the data as correct as possible. In addition, we look forward to hearing from the community with regards to future financings. While we recognize the data presented here is imperfect, we’re very confident it is directionally correct, and we feel it’s important to put a stake in the ground and highlight how rapidly the VC landscape is adjusting to the evolving Social Media landscape.

Amplify’d from www.secondshares.com

VC funding of Social Media companies soared to $819mm in Q4, almost equaling the $856 million that was raised by Social Media companies in first nine months of 2010.  Total funding for the year reaches $1.67 billion.

The surge in Social Media company financing was driven by the average deal size, which reached $14.4 million in Q4, vs. the $5.9 million average investment during the first nine months.  The surge in average deal size in Q4 was helped by the $200 million investment in Twitter.  However, even excluding the Twitter investment from the analysis, the average deal size still would have been $11 million in Q4, still almost doubling the average deal size of the first nine months.  And Twitter was not even the largest deal of the year, given the $300 million raised by Zynga in the second quarter.  Below is a list of the 10 largest Social Media investments in 2010, which totaled $906 million, an average of $90 million.  The 10 largest transactions equaled 54% of the total amount raised in the 202 Social Media investments made by VCs in 2010.  Interestingly, 8 of the 10 largest fundings of 2010 took place in the fourth quarter.

See more at www.secondshares.com



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