Venture-Capital Spending In IT Shows Slight Decline - InformationWeek
IoT
IoT
Software // Enterprise Applications
News
4/26/2005
01:50 PM
50%
50%

Venture-Capital Spending In IT Shows Slight Decline

VC investment in IT was $2.6 billion in the first quarter of 2005, down from the $2.7 billion invested in the fourth quarter of 2004, according to a survey released Tuesday.

Venture-capital investment in IT declined slightly in the first quarter of 2005. At $2.6 billion, it was just under the $2.7 billion invested in the fourth quarter of 2004, according to the MoneyTree survey released Tuesday by PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association.

Overall VC investment was $4.6 billion in the first quarter, down from $5.4 billion in the fourth quarter of 2004. VC investment has stabilized at between $4 billion and $6 billion per quarter for the past three years, after falling from the stratospheric levels of the dot-com boom, when VC investment topped $20 billion per quarter.

Software companies drew $1.1 billion in VC investment in the first quarter of 2005, down from $1.3 billion in the previous quarter. Biotechnology, the next highest category, drew $632 million, down from $1.2 billion in the fourth quarter. Software also led in the number of VC deals at 198, versus 68 for biotech.

Semiconductors were at $375 million, down from $520 million in the fourth quarter.

Several IT categories posted gains: telecommunications ($371 million, up from $325 million in the fourth quarter), IT services ($302 million, up from $192 million in the fourth quarter), networking and equipment ($347 million, up from $322 million in the fourth quarter), and computers and peripherals ($109 million, up from $81 million in the fourth quarter).

Despite some sluggish numbers, the outlook for IT investments remains encouraging, said Tom Crotty, general partner of Battery Ventures, in a conference call. "I think we're in a stable environment, which is a good thing after the roller-coaster ride of 1999 through 2003."

First-time financings were up in several IT categories in the first quarter, including software ($357 million, up from $307 million in the fourth quarter), and IT services ($171 million, up from $54 million in the fourth quarter).

Crotty said the increase in first-time financings reflects a need by VC firms to seek "white space"--mature companies that have succeeded without the need for venture capital.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of November 6, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll