Looking Up: First Quarter Venture Capital Deals & Dollars Rise

Xconomy National — 

Venture capital investments surged during the first three months of 2011, driven mostly by sharply increased funding for Internet and cleantech-renewable energy startups, according to CB Insights, a New York information and data services firm.

Venture investors sunk a total of $7.5 billion into 738 deals throughout the country during the first quarter, a 27 percent increase in dollars (with no significant change in deals) over the same quarter of 2010, when CB Insights reported $5.9 million in 730 deals. The $7.5 billion invested also was 15 percent higher than the $6.5 billion that went into 735 deals during the preceding quarter—which represented a two-year high water mark in both deals and dollars invested.

CB Insights says the consecutive quarterly increase in funding levels and deal flow is back to “pre-recession levels,” but left it to others to decide whether that represents a return to normalcy or an untenable VC investment bubble. The firm says most of the increase was due to substantial increases in funding levels for Internet companies and in the cleantech-renewable energy sector.

First-quarter venture funding for Internet startups amounted to $2.3 billion in 286 deals. That was an 83 percent increase in capital and a 29 percent increase in deals over the first quarter of 2010, when VCs put almost $1.3 billion in 221 deals. For reasons I still don’t understand, CB Insights split Chicago-based Groupon’s $900 million financing in December into two parts, counting half during the fourth quarter of last year and the other half in the first quarter of this year. Other notable Internet deals include $70 million for AppSense (based in the U.K. and New York) and $53.6 million for Indianapolis, IN-based Angie’s List.

In the cleantech and renewable energy sector, more than $1.9 billion was invested in 86 deals during the quarter. That was a 46 percent increase in dollars over the first quarter of 2010 (with no change in deals), when $1.3 billion flowed to 85 companies. Some notable deals: Almost $202 million for Oakland, CA-based BrightSource Energy, $150 million for Irvine, CA-based Fisker Automotive, and almost $52 million for Waltham, MA-based Harvest Power.

California—especially Northern California—continues to … Next Page »

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2 responses to “Looking Up: First Quarter Venture Capital Deals & Dollars Rise”

  1. Ashley says:

    Very interesting reading, thank you Bruce and Xconomy for this very comprehensive analysis.

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