Feeds

VCs rain cash on US net, biotech firms

'No major overfunding'

Boost IT visibility and business value

Tech firms have come up trumps in the US venture capital stakes, with internet companies showing strong growth for 2006.

According to a report by PricewaterhouseCoopers and the National Venture Capital Association, internet-specific companies - those whose business is dependent on the internet - raised $4bn in 645 deals in the US in 2006. This compares favourably to the year before, when the same sector received $3.2bn in 494 deals.

Last year's deals in this area accounted for 16 per cent of all venture capital dollars spent in that year. Some $25.5bn was sunk into VC deals during the whole year, in a total of 3,416 deals. This represents a 12 per cent increase in value from 2005 and was the highest level of investment seen since 2001.

The life sciences sector also saw significant growth in 2006, with record investment in biotech and medical device sectors. Some $7.2bn was invested in 731 deals during the year, compared to $6bn in 647 deals in 2005.

There was slight disappointment for the software sector, however, as investment remained relatively flat for the year. Some $5bn was ploughed into 865 deals, compared to 2005's figure of $4.8bn across 869 deals. Despite this, software was still the largest single industry sector for investment for both the year and the fourth quarter, in terms of deals and dollar value.

Also enjoying growth were the media/entertainment and energy sectors, while seed and early stage companies received increased financing and dollars in 2006. Expansion stage deals, however, saw the largest gains during the year, while first-time financings reached their highest level since 2001.

Although investment in the final quarter of 2006 fell to $5.7bn from $6.6bn in the third quarter of 2005, the figures were still within the range of the $4.3bn to $6.9bn investments seen over past five years.

"While top-line investment levels in 2006 were relatively steady overall, the increases in investment were in all the right places: early stage investing, first time financings, and industry sectors such as clean tech and life sciences that have room to scale," said Mark Heesen, president of the National Venture Capital Association. "And while there is considerable growth in these areas, we are pleased that, to date, quarterly investment levels have remained prudent and no major overfunding has occurred."

Copyright © 2007, ENN

Build a business case: developing custom apps

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.