Friday, January 23, 2009

Venture Capital Drops In Q4

PricewaterhouseCoopers and the National Venture Capital Association (NVCA) released their 2008 Q4 MoneyTree Report this evening, reporting that $28.3 billion was invested in 3,808 deals in the fourth quarter of 2008--the first yearly decline in venture capital totals since 2003. The report, based on data from Thomson Reuters, found that 2008 investments declined by 8 percent in terms of dollars, and 4 percent in terms of deal volume, with fourth quarter results seeing a 26 percent drop to $5.4 billion in 818 deals, down from $7.3 billion in the third quarter. Silicon Valley deals for the quarter totaled $1,966.7M, in 220 deals, a drop from Q3's $2.7 billion in 292 venture deals.

In terms of industries, "virtually all" industries had double digit declines in dollars and deals in Q4, according to the report, with software dropping to only $1.0 billion in deals--the lowest quarterly investment level in ten years. Life Sciences also saw a drop of 33 percent, to $1.6 billion in Q4. The yearly numbers looked a bit better, however, with Clean Technology seeing a 52 percent growth in dollars and a 16 percent growth in deal volume for the year to $4.1 billion invested in 277 deals, and Internet deals staying relatively flat at $4.9 billion in 851 deals, compared with $5.0 billion in 825 deals in 2007.

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