Wednesday, March 21, 2007

Study: $850M Invested by VCs on Web 2.0 In 2006

Ernst & Young and Dow Jones VentureOne are reporting today that global venture capital investments in Web 2.0 companies totaled $844.4M in 2006, twice as many dollars invested in the space in 2005, and with nearly twice as many deals. According to the study, there were 167 Web 2.0 deals last year, with a median pre-money valuation of $6M worldwide. Pre-money valuation of Web 2.0 deals were smaller than the overall median pre-money valuation of venture backed companies, which is $18.5M. Ernst and Young and Dow Jones found that the most active investors in the space were Benchmark Capital, Draper Fisher Jurvetson, Sequoia Capital, and the Omidyar Network. The study classified Web 2.0 firms as companies that include user-created content, podcasting, blogging, social networking, as well as companies using AJAX and other rich Internet applications.