VC Funding Of Social Media Companies Soars To $819 Million In Fourth Quarter

Social media

In a comprehensive review of the thousands of VC transactions in 2010, we attempted to identify each investment that was made in a company we considered to be a Social Media focused company. 

We then looked at each of those Social Media companies, and tried to identify each company that was, or will be, generating the majority of its revenue from the Facebook platform.

If you have a company that was left off the list or mis-classified in any way (timing of investment, lead VC, amount, description…), please let us know by writing us at [email protected]. We apologise ahead time for any mis-classifications, and will be updating the data in future publications.

Click here to see the charts →
This post originally appeared at SecondShares.

VC Funding in Social Media Companies Soared in Q4

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 was helped by the $200 million investment in Twitter

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.

The 10 Largest Social Media Investments of 2010

Above 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.

Facebook Focused Investments in 2010 Reach $610 Million

We estimate that of the total $1.67B raised by social media companies in 2010, $619 million, or 30% of the total Social Media investments in 2010, was invested in companies whose primary business is leveraging the Facebook platform.

The second quarter figures in the chart above were skewed by the $300 million investment in Zynga, without which, the total amount raised by Facebook focused companies in the 4th quarter would have almost equaled the total amount raised in the first three quarters.

Top 12 Social Media VCs in Terms of the Total Size of Deals Lead in 2010

The chart above looks at the data by VCs, ranking them in terms of total amounts raised by deals in which they were identified as the lead.

In the following slides, we detail the data behind all the charts. 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 recognise 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.

Q1 2010 VC Funding of Social Media Companies

Q2 2010 VC Funding of Social Media Companies

Q3 2010 VC Funding of Social Media Companies

Q4 2010 VC Funding of Social Media Companies

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.