Science Sectors Help Power 2Q Jump in Venture Financing

(Photos8.com)

Venture capitalists invested $6.5 billion in 906 deals in the second quarter of 2010, with both numbers representing sizeable gains over the first quarter of the year. And in the second quarter, science-based industries were among the leaders in attracting venture capital (VC). PricewaterhouseCoopers LLP and the National Venture Capital Association provide these findings in their quarterly MoneyTree reports from data collected by Thompson Reuters.

Overall, the second quarter’s $6.5 billion invested in 906 deals are increases of 34 percent in dollars and 22 percent in number of deals compared to the first quarter of 2010 when $4.9 billion was invested in 740 deals. In the first half of 2010, VC investments totaled $11.4 billion in 1,646 deals, a 49 percent jump in dollars and a 23 percent increase in deals from the first half of 2009 when $7.7 billion was invested in 1,340 deals.

Industries based on scientific findings tracked in the report were among the leading recipients of VC funding. Biotechnology drew nearly $1.3 billion in the second quarter, representing about one in five investment dollars overall, and a 59 percent increase over the $812.7 million invested in the first quarter. Medical devices and equipment brought in $755.4 million in investments, up 40 percent over the first quarter.

The MoneyTree report created in 1995 a special clean technology category that combines its industrial energy sector with pollution and recycling, power supplies and conservation. In the second quarter these companies attracted investments worth nearly $1.5 billion, more than doubling the $710 million invested in the first quarter. While the volume of VC dollars jumped significantly, the 71 deals in the second quarter was almost identical to the 70 deals recorded in the first quarter.

Not all science-based industries registered gains, however. Semiconductor companies drew $245.8 million in the second quarter, a decline of 60% compared to the $412.4 million invested in the first quarter.