Venture capitalists invested more in 2014 than in almost any year in the industry's history.
VC firms put a total of $47.3 billion into U.S. companies last year, a 62 percent annual increase and the highest funding level since 2001, according to CB Insights' latest venture capital report. Mega-financings of companies in the mobile sector such as Uber, Square, Snapchat and Instacart drove much of the spike in dollars invested, while the total number of VC deals rose 8 percent year-over-year to 3,617.
So why are U.S. businesses being flooded with capital?
Part of it has to do with the widespread investment activity of traditionally public market investors, such as hedge funds, mutual funds and sovereign wealth funds, according to CB Insights analyst Matthew Wong.
"That has prompted a lot of huge rounds and the euphoria for a lot of funding this year, especially in the tech space," he says. "Venture capitalists are just one slice of a broader ecosystem of investors who are investing in venture-backed companies."
Among all VC deals, seed-stage investments reached a five-year high with 976 total financings last year. The $1.33 billion invested in seed-stage companies also marked the highest dollar amount since 2009.
"Returns in venture are so driven by who gets in early to the companies that are big winners, so I think that's why you're seeing a lot of these investors at the seed stage," Wong says.
The number of venture-backed exits also grew significantly last year, rising 44 percent to 738. Facebook's $22 billion acquisition of messaging application WhatsApp claimed the largest venture-backed exit of 2014, followed by the initial public offerings of Lending Club and Zayo Group Holdings.
While the total number of IPOs rose 38 percent to 101, CB Insights characterized the IPO market as "mixed."
"There was the expectation that a lot of companies would go public on the tech side and instead [they] decided to raise money," Wong says.
The healthcare industry continued to dominate the IPO market last year, with 64 healthcare companies going public, up 68 percent year-over-year.
So what are analysts expecting from VC activity in the year ahead?
"Some venture investors are saying 2015 could be the biggest year for tech exits ever," Wong says. "It will be interesting to see if that's realized, because there are a lot of companies that are very valuable that are sitting on the sidelines that could probably IPO."
Below is a list from CB Insights of the most active venture capital firms, as measured by the number of unique investments in 2014.