By Grace Nasri (Managing Editor, FindTheBest)
Venture capital firms invested $28.4 billion into 3,673 deals last year, with the majority of deals going into the software and biotechnology industries. This year’s VC funding figures represent the third highest annual investment numbers in dollar terms of the past decade.
The annual figures represent an increase of 22% in dollar terms and a 4% increase in terms of deals conducted as compared to figures from the year prior, according to The MoneyTree™ Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.
The leading industries
The industries that experienced some of the largest dollar growth rates in 2011 included: Consumer Products and Services (103% increase); Media/Entertainment (53% increase); Electronics/Instrumentation (52% increase); and IT Services (39% increase) —according to data from Thomson Reuters.
But in terms of absolute numbers, the software and biotechnology industries continued to lead—receiving the largest overall investments of the year.
The software industry received the largest investments — with $6.7 billion invested into 1,004 deals. The 2011 figures represent a 38% dollar increase and a 7% increase in deals when compared to 2010 numbers.
The biotechnology industry was the second largest sector of last year, increasing 22% in dollar terms but dropping 9% in deals — with $4.7 billion going into 446 deals
California leads but New York is rising
Comparing California and New York VC investments and deals, Silicon Valley continues to overshadow Silicon Alley, with California-based investing almost 6.5 times that of New York-based investing in terms of dollars, and almost 5 times in terms of deals.
But when comparing 2011 numbers to 2010 numbers, VC investments in New York are rising 64.3% in terms of dollars and 10.2% in terms of deals, while investment in California is only rising 24.4% in terms of dollars and 5% in terms of deals.
Industries to watch in 2012
According to predictions by the NVCA and Dow Jones VentureSource, the IT sector is the sector to watch this year. Venture capitalists and VC-backed CEOs predict this year will see investment increases in consumer IT, healthcare IT and business IT. On the other hand, VCs predict investment decreases in the biopharmaceutical, medical device sectors and clean technology companies.
Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.
About the guest blogger: Grace Nasri is currently the Managing Editor at FindTheBest, a comparison search engine. Prior to FindTheBest, Grace was as an Assistant Editor at an international Iranian newspaper. She is a contributing blogger for the Huffington Post. Grace holds a BA in Political Science and Global Studies from UC Santa Barbara and an MA in International Relations from New York University. Follow her on Twitter at @GraceNasri.