Sunday, January 27, 2008

Venture capital funds

Venture capital investing hits six year high at$ 29.4 billion

Venture capitalists invested $29.4 billion in 3,813 deals in 2007 -- marking the highest yearly investment total since 2001 -- according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Financial. The total invested in 2007 represents a 10.8 percent increase in dollars and a five percent increase in deal volume over 2006. Investments in the fourth quarter of 2007 totaled $7.0 billion in 963 deals, marking the fourth straight quarter with investments totaling more than $7 billion - a phenomenon not seen since 2001.

Much of the increase in investments over the prior year can be attributed to record
investment levels in the Clean Technology and Life Sciences sectors as well as strong
investment levels in Internet-specific companies. Seed/Early-Stage companies received
more dollars in 2007, but Later Stage investments experienced the most dramatic increase during the year. At the same time, first-time financings reached a six- year high as venture capitalists placed more initial bets in companies across multiple sectors.

Software investing remained relatively flat in 2007, consistent with levels over the last five years with $5.3 billion going into 905 deals, compared to $5.1 billion going into 920 deals in 2006. Despite the lack of growth, it still remained the largest single industry category for the year both in terms of deals and dollars, edging out Biotechnology for the top position.

Internet-specific companies received $4.6 billion in 748 deals in 2007, an increase of 12 percent and eight percent, respectively, over 2006 when these companies received $4.1 billion in 691 deals. ‘Internet-specific’ is a discrete classification assigned to a company whose business model is fundamentally dependent on the Internet, regardless of the company’s primary industry category. These companies accounted for 16 percent of all venture capital dollars in 2007, approximately the same percentage as in 2006.

The Media and Entertainment industry saw more venture capital dollars in 2007, with $1.9 billion going into 340 deals compared to 2006 when $1.7 billion went into 318 deals. Other industries that saw increases in deals and dollars during the year include Business Products and Services, Financial Services, IT Services, and Retailing/Distribution.

Telecom companies saw a decrease in investment in 2007 with 290 deals receiving $2.1 billion dollars, a drop from the $2.6 billion in 301 deals they captured in 2006. Other industries that experienced declines in deals and dollars in 2007 include Healthcare Services, Semiconductors, and Electronics/Instrumentation.

No comments: