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Rediff.com  » Business » VC investments rise 19% to $7.5 billion

VC investments rise 19% to $7.5 billion

Source: PTI
August 16, 2011 16:29 IST
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Venture capital investments grew at a rapid pace across the US in the April-June quarter of 2011, surging by 19 per cent to $7.5 billion, says a new report.

According to the report by PricewaterhouseCoopers LLP (PwC), venture capitalists invested $7.5 billion in American companies through 966 deals in the second quarter of the 2011 calendar year.

This was the highest VC deal value registered in a single quarter since the second quarter of 2008.

In comparison, a total of 814 deals worth $6.3 billion were inked in the January-March quarter of 2010.

"This quarter's increased investment levels signal an incredible opportunity for job creation and innovation, but if current dynamics continue, it will not be sustainable," the report said.

This takes the total deal value for the first half of 2011 to $13.8 billion through 1,780 deals, a 12 per cent increase from $12.3 billion via 1,784 deals in the year-ago period.

During the quarter, the life sciences sector (biotechnology and medical device industries) and internet-specific companies attracted the most interest

from venture capitalists.

The life sciences industry saw a 37 per cent rise in the value of VC deals to $2.1 billion during the second quarter. In addition, the number of deals witnessed in the sector rose by 12 per cent to 206 in the second quarter.

Venture capital investments in internet-specific companies also exhibited robust growth in the second quarter, with $2.3 billion pumped into 275 companies. This level of

investment represents a 72 per cent increase in the deal value and a 46 per cent rise in the number of deals vis-à-vis the first quarter, which witnessed 189 deals worth $1.4 billion.

In addition, the software space witnessed an investment of $1.5 billion during the second quarter of 2011. This represents a 35 per cent increase in deal value compared to the $1.1 billion investment made by venture capitalists in the previous quarter.

Looking ahead, the report said that overall, the increase in investment levels in the second quarter is encouraging for entrepreneurs.

"At the current pace of venture capital investing, 2011 is on track to exceed $26 billion, which would put it as the sixth most active year in VC investing history," it added.

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