VC funding slips slightly in Q2
Venture capitalists put $8 billion into 776 deals in the second quarter, a five percent decrease in investment and a two percent decrease in deals from the same period last year, said the report. The median amount raised was $5.2 million, up from the $4.6 million a year earlier.
The rise in public offerings and corporate acquisitions kept a lid on VC investing. "Venture investment has held steady as companies either plot an exit or use creative financing strategies like government grants, corporate leasing, or project financing to fuel growth," said Jessica Canning, global research director for Dow Jones VentureSource.
Startups in information technology raised $2.3 billion in 255 deals, a five percent increase in deals and a nine percent increase in capital invested over the second quarter of last year. The software sector, which saw a deep decline in 2009, has regained its momentum thanks to renewed interest in business applications and communications software, said the report.
Software companies raised $1.2 billion in 184 deals, a 10 percent increase in deals and a 26 percent jump in capital. Deal activity in all other sectors of IT—including communications and networking, electronics and hardware, and semiconductors–was down.
Deals for health care companies slowed 12 percent and capital invested dropped 17 percent with 184 deals raising $2.3 billion in the quarter. The medical devices sector was essentially flat as 84 deals raised $925 million. Medical IT, including software and services for handling medical records and data, was a bright spot as 19 deals collected $198 million, a 58 percent jump in deal activity and a 27 percent increase in capital invested.
The consumer services sector raised $1.3 billion in 138 deals, a 51 percent jump in capital raised and a 7 percent increase in deals over the same period last year. The consumer information services sector, which includes social media, entertainment and other consumer Web companies, collected 25 percent more capital than the year-ago period.
The energy and utilities industry raised $566 million in 29 deals, less than half the capital raised for the 30 deals completed in the second quarter of 2010. The renewable energy sector continued to account for most of the industry’s investment with $540 million raised in 27 deals.
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