PHILADELPHIA, Oct. 28, 2013 (GLOBE NEWSWIRE) -- Philadelphia's venture capital community expects an increase in VC IPO activity and venture investment in 2014, and the vast majority are raising capital or planning for growth, according to the results of a recent survey conducted by KPMG LLP, the U.S. audit, tax and advisory services firm.
The KPMG survey of more than 240 Philadelphia-area venture capitalists, entrepreneurs and professional advisors conducted October 22 and 23 at the IMPACT 2013 Conference of the Greater Philadelphia Alliance for Capital and Technologies (PACT), found that nearly 50 percent of respondents expect VC IPO activity to increase in 2014, up from 33 percent in KPMG's 2012 survey. Additionally, half of the respondents expect total venture capital investment to increase in 2014, while 32 percent expect it to remain the same, and 19 percent expect a decrease.
Asked what their companies are doing in the current environment, 36 percent said 'raising additional capital,' 25 percent said 'hiring and planning for additional growth,' and 14 percent said 'increasing capital expenditures and investments'—for a pro-growth total of 75 percent. In addition, 66 percent of respondents said it is likely that their companies will be involved in a merger or acquisition in the next two years, down slightly from 75 percent in last year's survey – 28 percent as buyers and 38 percent as sellers.
"We've seen some recent successful offerings that are fueling an aggressive appetite for IPO offerings," said Brian Hughes, KPMG partner based in Philadelphia and co-leader of its Venture Capital Practice. "Clearly the local venture community is upbeat on investment levels, and they have set their sights on capitalizing on the momentum in the IPO market."
Top Investment Areas:
Life sciences and healthcare IT were cited by 28 percent as the sectors with the most attractive investment opportunity (up from 13 percent in 2012). Cloud and SAAS were close behind at 27 percent. Another 20 percent said mobile (down from 30 percent in 2012) followed by technology at 9 percent.
"The shift toward life sciences and healthcare IT as attractive sectors for investment is aligned with what we're seeing nationally," said Hughes. "Investors are hungry for medical technology innovation and are putting money into life sciences and healthcare IT."
Regarding which investment stage will be most promising in 2014, 50 percent said expansion stage (up slightly from 47 percent last year), followed by 28 percent who said early stage (down from 35 percent last year), startup/seed (13 percent) and later stage (9 percent).
"Investors want to see proof of concept and strong customer demand before committing capital," said Hughes. "Increased investment appetite in the early and expansion-stages is a trend we'll continue to see as entrepreneurs build new companies leveraging the advances in cloud computing, social media and mobile devices."
About KPMG's Venture Capital Practice
KPMG's Venture Capital practice offers audit, tax and advisory services tailored for venture-backed companies at each stage of development. Our global network of VC professionals helps simplify the complex marketplace challenges facing entrepreneurial clients. Our mindset matches the companies we serve: entrepreneurial, hands-on, proactive, visionary and dedicated. To learn more, visit KPMG's Venture Capital practice.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 152,000 professionals, including more than 8,600 partners, in 156 countries.