SAN JOSE, Calif. – Fewer startups did more with less in 2011 in a sign of the ongoing tight market for venture capital, according to the latest figures from Dow Jones VentureSource.
In 2011, 522 acquisitions and IPOs raised $53.2 billion, a 14 percent drop in deals but a 26 percent increase in capital compared to 2010, VentureSource said. The median price paid for a startup spiked 77 percent to $71 million in 2011, while the median amount of funding raised by a startup before an exit declined 12 percent to $17 million.
Forty-five companies raised $5.4 billion through public offerings in 2011, up from $3.3 billion raised in 46 IPOs in 2010. Web 2.0 darlings Groupon and Zynga skewed the results with IPOs that netted a combined $1.7 billion.
Currently 60 U.S. startups are in registration for an IPO. Thirteen filed in the last quarter of 2011.
Startups raised more money to get to an IPO, but took less time getting there in 2011. The median amount raised for an IPO increased 17 percent to $85 million in 2011, but the average IPO came when the startup was 6.5 years old compared to 8.1 years in 2010.
"During 2012 we'll get a sense of whether the last two years of flat IPO activity is the new normal for the industry or if there is room to grow," said Zoran Basich, editor of Dow Jones Venture Wire, speaking in a press statement.
In one dour sign, acquisition activity in the fourth quarter of 2011 did not outpace deals in the third quarter for the first time in five years, VentureSource said.