Thursday, September 21, 2006

Web 2.0 Investments Hit $262.3M In First Half

Dow Jones VentureOne is reporting this morning that investments in U.S. Web 2.0 companies has hit $262.3M in the first half of 2006. The publisher of venture capital data said that 49 Web 2.0 companies were funded in the first half of 2006, for a total of $262.3M in investments, compared to 51 deals and $199.1M in companies in all of 2005. The company said that the numbers indicate activity is likely to double last year's level. Dow Jones included companies which include user-created content, podcasting, tagging, blogs, social networking, mashups, and wikis, and which use technologies such as AJAX, RSS, SOA, CSS, XHTML, Atom, and rich Internet applications. Interestingly enough, VentureOne pointed out that the median pre-money valuation of Web 2.0 companies was only $5M, versus median pre-money valuations of venture backed companies of $20M. The largest Web 2.0 deals for the year were Palo Alto-based Facebook ($25M in a Series B) and San Mateo-based Zimbra ($14.5). The most active investors in the space were Accel Partners, General Catalyst Partners, and Draper Fisher Jurvetson.