By Donald Zuhn –-
Friday, the National Venture Capital Association (NVCA), a trade association
representing the U.S. venture capital industry, released the results of its
latest MoneyTree Report on venture funding. The study, conducted with PriceWaterhouseCoopers based on
data from Thomson Reuters, indicates that venture capitalists invested $4.7 billion
in 681 deals in the first quarter of 2010, a 9% decrease in dollars and 18%
increase in deals as compared to the fourth quarter of 2009. After adjusting its fourth quarter
numbers, the NVCA determined that $5.2 billion had been invested in 832 deals,
as opposed to its initial determination that $5.1 billion had been invested in
794 deals. While the NVCA report
indicated that both the dollars and deals were down from the fourth quarter of
2009, the NVCA noted that the numbers for the first quarter of 2010 were higher
than for the same quarter in 2009, when $3.4 billion was invested in 635 deals.
It was a case of good news, bad news for the Life Sciences sector (biotechnology and medical devices) in the first quarter. On the bad news side, Life Sciences investing dropped to $1.3 billion in 160 deals for the first quarter, which constituted a 26% drop in dollars and a 21% decrease in deals as compared with the fourth quarter of 2009. On the good news side, Tracy Lefteroff of PricewaterhouseCoopers noted that "Life Sciences continues to be the number one sector for VC investing, with biotechnology being the absolute single-industry leader in dollars invested over the past four quarters." In particular, the biotech sector drew $825 million in 99 deals in the first quarter. However, these numbers still represented a 24% decrease in dollars (down from $1.1 billion in the fourth quarter) and a 14% drop in deals (down from 115 deals in the fourth quarter).
NVCA President Mark Heesen said that "[d]espite a great deal of economic uncertainty in the first quarter, the venture capital industry moved forward with a more active start than it did in 2009, which bodes well for the remainder of the year." He expected venture funding to increase moderately throughout the remainder of 2010, in part because of the passage of health care reform legislation.
Additional information regarding the latest report can be found here.
For additional information on this and other related topics, please see:
• "VentureDeal Report Shows 65% Increase in Fourth Quarter Biotech Venture Funding," March 16, 2010
• "NVCA Report Shows Slight Drop in 4Q Venture Funding and Sharp Decline for 2009," January 24, 2010
• "Biotech/Pharma Companies Look to Market for Capital," December 29, 2009
• "NVCA Study Shows Increase in Third Quarter Venture Funding," October 23, 2009
• "Biotech/Pharma Financing Improving, R&D Spending Up," August 31, 2009
• "Investors Saw Biotech Rebound Coming," August 17, 2009
• "Is Biotech/Pharma Beginning to Bounce Back?" August 12, 2009
• "First Quarter Venture Capital Funding at 12-Year Low," April 23, 2009
• "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009," February 16, 2009