Venture capital firms invested $7.0 billion in 898 deals in the second quarter of 2012, rising above first-quarter levels of $6.0 billion and 809 deals. That’s according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.
Investments still lag last year’s overall pace. “If funding levels in the second half of the year remain consistent with the first half of the year, VC investing in 2012 will fall short of the nearly $30 billion invested in 2011 but will exceed the $23 billion invested in 2010,” according to Tracy T. Lefteroff, global managing partner of venture capital at PwC US.
Two sectors in particular saw good news and hold promise for interim executives interested in early-stage companies or the technology sector. Early-stage companies saw 410 early-stage deals of $2.1 billion, reaching a highest quarterly total since Q1 2001, and reflected a commitment by venture firms to companies that innovate. Internet-specific companies saw investments rise by 22 percent to $1.8 billion from $1.5 billion in Q1.
Lefteroff said software and internet companies continue to attract VC because most of those companies “tend to be capital efficient and don’t require large amounts of capital to operate.” Lefteroff also mentioned the attractiveness of potential for profitable liquidity events, according to the press release.
The life sciences sector saw investing decline for the fourth consecutive sector. Notably, investment in biotechnology declined to $697 million, representing the “lowest quarterly total for the industry since the first quarter of 2003,” according to the report. Regulatory challenges and capital requirements were said to account for the continuing decline in the life sciences industry.
According to the report, 11 of the 17 MoneyTree sectors experienced increases in dollars invested in the second quarter, including Semiconductors (63 percent increase), Media & Entertainment (62 percent increase), Telecommunications (44 percent increase), Industrial/Energy (15 percent increase) and IT Services (12 percent increase).