Here is an atricle from WSJ´s VC blog.
“Riding solid gains in life sciences, venture investors opened their wallets a bit wider in the second quarter, increasing their investment pace after a dismal first quarter.
Overall, venture capitalists invested in 744 companies in the second quarter, up from 656 in the year-ago period and 602 deals in the first quarter of 2010. That amounted to $7.75 billion in the second quarter, up from $6.11 billion in the year-ago period and $4.66 billion in the first quarter of 2010. The new data come from VentureSource, which like VentureWire and The Wall Street Journal is owned by Dow Jones & Co., a division of News Corp.
But the improvement was mostly relative – the $12.41 billion raised altogether in the first half was an improvement on the $10.43 billion raised in the first half a year ago but still less than the first-half figures posted in the years 2006-2008.
At the same time, the macro-economic climate has improved, providing more confidence for investors who last year were more concerned about their existing companies than finding new ones. The economic improvement also gives confidence that exits will eventually materialize.
“Things have loosened up substantially,” said Dave Hills, general partner at KPG Ventures. “When nobody was sure what would happen, people were very concerned about follow-on investments they had to make with companies in their portfolios. Those have stabilized and now it makes sense to look for newer deals to put more money to work.”
Continuing a trend begun in 2009, when health care outpaced information technology for the first time in a decade, medical investment topped IT for the second quarter and for the half.
VCs pumped $2.72 billion into 201 health-care financings last quarter, a 14.7% leap from the $2.37 billion deployed in 189 rounds in the same time last year. The second-quarter total more than doubled the $1.23 billion invested in 151 rounds in this year’s first quarter, which had been the worst period for investment since the first quarter of 2003, when firms committed $1.14 billion to 118 financings.
Meanwhile, information technology was up to 231 deals in the second quarter, from 208 in the year-ago period and 186 in the first quarter of 2010. That represented $1.92 billion invested in the second quarter, up from $1.55 billion in the year-ago period and $1.48 billion in the first quarter of 2010.
While almost one-third of second quarter financings were seed or first rounds, there has still been caution in later stage deals, because of volatility in the public markets that has made both large IPOs and M&A deals hard to come by.”
Read the full article here.
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