January 22, 2012

Venture Capitalists Investments soar to $28.4 Billion!

VC Investing Soars 22 Percent To $28.4B In 2011, Internet Sector Reaches Highest Levels In A Decade
Double-digit increases in investment dollars in 2011 were spread across a number of industries, including the Clean Technology and Internet sectors. Investment dollars also increased across every stage of investment categories, with the exception of a 48 percent decrease in seed stage investments.
Tracy T. Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers observes that investors “are acting prudently and not chasing excessive valuations” and we’re “unlikely to see these sectors overheat like we saw in the 1999 to 2000 era.”

The Software industry brought the most VC dollars by sector for the year, with the amount raised up 38 percent over 2010 to $6.7 billion in 2011. VCs invested into 1,004 software deals, a 7 percent rise in volume over the prior year. Reflecting the fourth quarter decline, software investing was down in the last quarter of 2011 with $1.8 billion going into 238 deals. Despite this decrease, software was also the number one sector for dollars invested and total number of deals in Q4 and counted more than double the number of deals during the quarter than the second largest sector, Biotechnology.
Internet companies also saw a significant increase in investing in 2011 with $6.9 billion going into 997 deals. That’s a 68 percent increase in dollars and 24 percent increase in deals from 2010 when $4.1 billion went into 807 deals. In fact, 2011 marked the highest level of Internet investment over the past decade.

Early Stage investments experienced double-digit increases, rising 47 percent in terms of dollars and 16 percent in terms of deals in 2011 to $8.3 billion in 1,414 deals. For the fourth quarter, Early Stage investments increased, with $2.3 billion going into 364 deals, an 11 percent increase in dollars in Q3 while the number of deals was flat. Early Stage companies attracted 29 percent of dollars and 38 percent of deals in 2011 compared to 24 percent of dollars and 35 percent of deals in 2010.
Expansion Stage investments increased in 2011 by 9 percent in dollars and dropped 8 percent in deals with $9.7 billion going into 999 deals. Expansion funding dropped in the fourth quarter, dipping 9 percent from the prior quarter to $2.4 billion. The number of deals also decreased during the quarter, falling 21 percent to 222. Expansion Stage companies attracted 34 percent of dollars and 27 percent of deals in 2011 compared to 38 percent of dollars and 31 percent of deals in 2010.
In 2011, $9.5 billion was invested into 864 Later Stage deals, a 37 percent increase in dollars and a 5 percent increase in deals for the year. For the fourth quarter, $1.8 billion went into 178 deals, which represents a 26 percent decrease in terms of dollars and a 9 percent decline in terms of deals from the third quarter of 2011. Later Stage companies attracted 33 percent of dollars and 24 percent of deals in 2011 compared to 30 percent of dollars and 23 percent of deals in 2010.

Reblogged via Techcrunch

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