CrunchBase Monthly Market Momentum

September 4, 2014

Just a month ago, we highlighted the emergence of fintech startups by measuring investor momentum over all of CrunchBase’s major market categories. Now, we have extended this methodology forward another month to find the new leader. Through August, cloud computing, big data and music startups have shown the largest increase.

Measured over six months, the moving average of venture-funded music startups increased 1.2% in August, as investors have increasingly poured money into disrupting the music industry. In past months, music companies made headlines as SoundCloud and Shazam closed major rounds and Apple scooped up Beats Electronics for $3B. In addition to the big splashes, many smaller startups are wading into the market with fresh seed and angel funding. It is now the third hottest market in CrunchBase by our momentum measure.

Most of the music money this month went toward streaming platforms in an apparent attempt to compete in international markets with giants like Spotify and Pandora. Taiwan-based KKBOX scored the largest investment in music this August, with a $104M round led by Singapore GIC to expand overseas. KKBOX currently operates within Taiwan, Japan, Hong Kong, Singapore, Malaysia, and Thailand. Zvooq, based in Moscow and active in Russia, Ukraine and Central Asia, also raised $20M this month in a Series A round. Beatpacking of South Korea, along with SF Bay Area startups 8tracks Radio, Rockbot and Muzooka rounded out the streaming and internet radio fundings in August. 

Aside from streaming services, Neil Young’s PonoMusic raised $6M in new equity crowdfunding on top of the $6.2M Kickstarter in April for its high fidelity music player. The additional round, raised via Crowdfunder, is to build a music download service focusing on ultra high-quality titles. In all, the eleven rounds totalled over $138M in the single month, the highest since November 2013 for the music market.

Although at a much smaller scale (only $17M total funding this month), cloud computing startups were the top market by our measure of momentum, with a 1.8% increase this month. In the spring, investors tallied over 20 rounds in each of March, April and May and have not let up much in the slow summer months. Although the median round size for cloud computing companies is just under $2M this year, enterprise players like PagerDuty and New Relic have also banked big rounds this summer.

Apps and Big Data were the only other markets to keep their positive momentum after a long, slow summer for VC. Medallia’s $50M Series C from Sequoia was the largest of the twenty big data fundings in August, and Brazil’s Movile led the Apps space with a $55M Series D split between Naspers and Innova Capital.

The rest of the markets in the red after August follow the general trend of seasonality in the venture landscape. Since 2005, August has accounted for just 7.2% of recorded funding rounds. Only the short month of February along with November and December have a lower share. Based on these trends, we can expect more momentum across the board going into Q4 as September and October have historically been the second and third most active months.

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