Donald Zuhn – -
On Tuesday, the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, released the results of its latest venture funding study. The study, conducted with PriceWaterhouseCoopers and Thomson Reuters, indicates that venture capitalists invested $4.8 billion in 637 deals in the third quarter of 2009, a 17% increase in dollars and 3% decrease in deals as compared to the second quarter of 2009.
According to the study, the Life Sciences sector, which comprises the biotechnology and medical device industries, had a "solid quarter" relative to other industry sectors. In particular, the biotech industry, which received the highest level of funding in the third quarter, secured $905 million in 104 deals (a 4% decrease in dollars and a 16% increase in deals relative to the second quarter), and the medical device industry received $617 million in 71 deals (a 6% decrease in dollars and 15% decrease in deals). In contrast, the Software sector dropped to its lowest level of funding since 1996, and ten of the 17 sectors examined by the NVCA experienced dollar declines in the third quarter, including Semiconductors (14% decline; a 10-year low), Healthcare Services (57% decline), Computers and Peripherals (40% decline) and Telecommunications (17% decline).
Tracy Lefteroff, the global managing partner of the venture capital practice at PricewaterhouseCoopers called the increase in third quarter venture capital funding "very encouraging," and predicted that the pace of investing would "continue to strengthen over the next several quarters as long as the IPO markets begin to open up and M&A activity increases."
Additional information regarding the study can be found here.