The venture capital industry declared a return to normalcy yesterday, after reporting that investments in the second quarter hit a two-year high.
VC funds invested $5.6bn in the second quarter, across 761 companies, according to the latest MoneyTree survey from Pricewaterhousecoopers, Thomson Venture Economics and the National Venture Capital Association. The $5.6bn figure capped a drifting upwards of market over the last years, according to the survey.
Early stage financings accounted for 229 of the deals, the highest level in two years, the survey found, and took in $1.17bn. Later stage fundings were flat, at $1.6bn, which was taken as a sign that existing ventures are gaining their feet, generating business, and therefore required less handholding from their backers.
The life sciences sector took the biggest chunk of funding – $1.41bn. However, software was still the biggest individual segment, taking $1.2bn across 212 companies. Telecoms took $518m across 59 companies, while 44 networking companies snagged $459m.
Tracy Lefteroff, global managing partner of the venture capital practice at Pricewaterhousecoopers, said the figures justified a feeling of refined optimism about the VC market.
Lefteroff pointed to a good spread of industry and company size in the figures, which augured well for solid growth in the future: There isn’t a break away industry.