Category: Venture capital

US venture capital investments sank 61% in Q1 2009, dropping to the lowest level in 12 years. VC investments totaled $3 bln in Q1 2009, according to PriceWaterhouseCoopers, the National Venture Capital Association and Thomson Reuters. In Q1 2008, investments totaled $7.74 bln. This is the lowest quarterly level of venture investments since Q1 1997, when they totaled $2.96 bln.

US VC investments in the US totaled $5.4 bln during Q4 2008, according to PriceWaterhouseCoopers, the National Venture Capital Association and Thomson Reuters. This compares to the $8.1 bln invested in Q4 2007 and is the lowest quarterly level of venture investments since Q1 2005. Fourth-quarter investments went to 818 companies, down from 1,051 in Q4 2007. Investments in software companies dropped to their lowest level in 10 years, as $1 bln was sunk into 194 companies. In Q4 2007, 245 software companies received $1.4 bln in investments.

IT Venture capital dropped to $11.64 bln for all of 2008, down 14.5% from 2007, according to VentureSource. Software companies, which continue to capture the largest slice of IT venture investments, dropped 16.4% during the year, to $4.73 bln in funding.

Less than 20% of VC portfolio poised for exit in 2009 as IPO market recovery not seen for at least a year; M&A activity seen increasing as valuations drop. In polling 270 venture capitalists, corporate buyers and entrepreneurs, KPMG found that 73% of respondents expect their firm’s revenue to stay the same or increase in 2009. In fact, 52% expect revenue growth to increase, including 37% who predict revenue growth in excess of 10%. Only 26% see declining revenues in the year ahead. KPMG conducted the survey in collaboration with AlwaysOn, the venture capital new media organization. Venture capitalists expect the negative IPO trend to continue in 2009, with 88% of respondents expecting IPO activity to stay the same or to decline further. Additionally, 82% of venture capitalists surveyed indicated that they do not anticipate recovery in the IPO market for at least 12 months. The outlook on IPO activity has clearly impacted venture capital exit opportunities, and 80% of respondents said less than 20% of their portfolio is poised for exit in 2009.

The pace of US venture capital investments remained steady at $7.4 bln during Q2 2008 despite a wobbly stock market that has made it increasingly difficult for the financiers of new ideas to cash out of startups. The amount of money spread across 990 deals in Q2 2008 was unchanged from the same time 2007, according to National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters.

US VC investments dropped by 5% to $7.1 bln during Q1 2008. This was the first YTY decline in the venture capital industry’s quarterly investments since the end of 2005, National Venture Capital Association says. In Q1 2007 VCs invested $7.5 bln. More deals got done in in Q1 2008 than Q1 2007 – a total of 922 compared with 861 in 2007.

Venture capitalists invested $928 mln in Indian companies in 2007, a significant 166% jump compared to 2006 level, VentureBeat reports.

US venture capitalists invested a total of $29.4 bln in 2007, up 10.8% from 2006. The number of deals reached 3,813 in 2007, a modest rise of 5% over 2006, PriceWaterhouseCoopers reports.

Venture capitalists raised $34.7 bln in funds in 2007, an increase of 9.4% and the most the industry has raised since 2001, when it raised $38.8 bln, Thomson Financial and the NVCA (National Venture Capital Association) reported.

38 venture-backed companies completed IPOs in Europe. They raised 893 mln euros, according to Dow Jones VentureSource. The growth is down from 89 companies and 1.7 bln euros in 2006. The median amount raised via IPO was 15.8 mln Euros, the highest in 6 years.

Venture funding for all industries has fallen by more than half since 1999, dropping from $54.1 bln then to $26.5 bln in 2006, according to the National Venture Capital Association. Funding for Internet startups is running at roughly $1 bln a quarter in 2007, down from a high of $14.27 bln in Q1 2000.Int

Acquisitions of US venture-backed companies in Q2 2007 declined noticeably, with 81 transactions totaling $7.6 bln, compared to 98 transactions totaling $9.6 bln in Q1 2007. The median acquisition amount was $55.8 mln, which was also a noticeable decline from Q1 2007 but above the average for 2006, Fenwick & West survey says.

IPOs of venture-backed companies increased to 22 companies raising $2.7 bln in Q2 2007, compared to 13 IPOs raising $1.2 bln in Q1 2007. The amount raised in venture-backed IPOs in Q2 2007 was the highest amount raised since Q3 2000 and the $3.9 bln raised in venture-backed IPOs in Q1 2007 and Q2 2007 surpassed the total amount raised through such activity in all of 2006, Fenwick & West survey says.

US venture investment in health care continued to be strong with $2.4 bln of total investment, of which $1 bln went to medical device companies, the highest total on record for that segment of the health care industry. IT investment also continued to be strong with $4.1 bln invested, with information service companies (which includes Web 2.0 companies) receiving close to $1 bln, a substantial increase for that industry segment, Fenwick & West survey says.

The amount invested by venture capitalists in the US in Q2 2007 was approximately $7.4 bln in 717 transactions, compared to $7 bln raised in 584 transactions in Q1 2007. The amount invested this Q was the highest amount of venture investment in a single quarter since Q4 2001, Fenwick & West survey says.

Spending on the development of new energy and environmental technologies is projected to grow by 14% in 2007 to exceed $55 bln worldwide, with corporate and government spending up 10% and venture capital on track to double.

Healthcare Corporate Finance News published a list of top venture companies investing into healthcare sector.

Venture investing in healthcare sector
Venture capital firm	Deals
Alta Partners	8
Canaan Partners	6
Sofinnova Ventures/Sofinnova Partners	6
ARCH Venture Partners	5
Domain Associates	5
Pequot Ventures/Capital	5
New Enterprise Associates	5
Novartis BioVentures/Novartis Venture	5
Three Arch Partners	5
Versant Ventures	5
Advent Venture Partners	4
Asset Management Company	4
Bay City Capital	4
Frazier Healthcare Ventures	4
Novo A/S	4
Source: Healthcare Corporate

Healthcare Corporate Finance News published a list of venture investments into healthcare companies.

Healthcare venture investments in Q1 2007
Sector	Deals	Amount
Biopharmaceuticals	23	$727.4
Medical Devices	43	$726.1
Pharmaceuticals	19	$660.4
Biotechnology	27	$392.9
Health Care Services	9	$197.1
e-Health	9	$52.3
Other	4	$48.0
Total	134	$2,804.2
Source: Healthcare Corporate

Venture capital investment in US health care companies was up solidly in 2006 compared to 2005 ($8.2 bln vs. $7.4 bln). Health care’s share of total US venture investment increased slightly from 31% in 2005 to 32% in 2006. US medical device/equipment companies raised approximately $2.6 bln in 2006, the best year ever for that sector.

Israeli venture capital funds raised $473 mln in 2006, a 67% decline from the $1.46 bln achieved in 2005.

The amount invested by venture capitalists in the US in Q4 2006 was approximately $5.8 bln. Although this amount was approximately 15% less than the amounts invested in Q3 2006 and Q2 2006, it fell solidly within the $5-7 bln quarterly range seen since the end of 2003. Overall the amount invested by venture capitalists in the US in 2006 was up approximately 8% over 2005. Acquisitions of venture backed companies in the US fell in Q4 2006 with 75 transactions totaling $7.3 bln, compared to 112 transactions totaling $7.7 bln in Q3 2006. However 2006 in general was the best acquisition year for venture backed companies since 2000, both in terms of aggregate amount paid ($31.2 bln) as well as median amount paid per transaction ($52 mln). IPOs of venture backed companies improved noticeably in Q4 2006, with 18 IPOs raising $1.2 bln in Q4 2006. 2006 was the second best IPO year since 2000, with 56 venture backed IPOs raising $3.7 bln, FenWick & West says.

Healthcare companies had another good year, with venture investment increasing to $8.25 bln, up 12% over 2005, and the industry accounting for 28 of the 56 IPOs. Information services (which includes Web 2.0 companies) also had a good year with investment increasing to $2.4 bln, up 27% from 2005. Alternative energy had a substantial increase in activity with investment at $537 mln being close to three times higher than 2005, Fenwick & West says.

Cleantech Venture Network reported that North American VC investment in the cleantech category totaled a record $2.9 bln for 2006, representing a 78% increase over 2005 cleantech investment of $1.6 bln, and a 140% increase over 2004 investment of $1.2 bln. About $613 mln was invested in cleantech in Q4 2006, a 22% increase over the Q4 2005 investment of $502 mln. The Q4 2006 was down from the record invested in Q3 2006 of $933 mln. Energy-related investment accounted for $2.1 bln, or 74%, of the total 2006 cleantech venture investment. This represented a 1.9x increase over the $739 mln invested in the energy category in 2005 and a 2.9x increase over 2004 energy investment. The Energy Generation segment totaled $1.3 bln, a 2.1x increase from 2005. Energy Storage attracted $354 mln, representing a 2x increase over 2005.

In 2006, venture capitalists put $727 mln into 39 alternative energy start-ups, compared with $195 mln in 18 such firms for 2005, according to the National Venture Capital Association.

VC investments in 2006 rose 10% to $25.5 bln, the highest level since 2001, according to PricewaterhouseCoopers and the National Venture Capital Association.