Cleantech, Electronics Venture Funding Jump in 2010

Venture capital investments recorded a solid increase in 2010 over 2009, the first annual jump since 2007. Industries based on science and engineering were among the gainers, particularly clean technology and electronics. The statistics were contained in the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), based on data from Thomson Reuters.

Overall, venture capital (VC) funding totaled $21.8 billion in 2010, rising 19.4 percent from $18.3 billion in 2009. Until 2010, annual VC investments have decreased each year since the $29.9 billion registered in 2007.

VC investors in 2010 much preferred investments in going concerns rather than start ups. Some $14.8 billion went to expansion and later-stage investments, about two-thirds (68%) of all VC dollars. While the number of seed capital deals rose slightly to 363 in 2010, the total amount of seed investments dropped 1.6 percent to $1.7 billion.

Investments in clean technology companies jumped 76 percent from $2.1 billion in 2009 to $3.7 billion last year. The Clean Technology category crosses traditional MoneyTree industries and comprises alternative energy, pollution and recycling, power supplies and conservation. The number of VC cleantech deals also increased to 267 from 195 in 2009. Both the total dollars invested and number of deals in 2010 are still down from the $4 billion invested in 277 deals during 2008.

Investments in electronic engineering companies also increased solidly in 2010. VCs invested $375 million in electronics and instrumentation companies, a 25 percent gain in 2010. Semiconductor investments in 2010 rose to $952 million, a 20.2 percent jump.

Companies based on life science research attracted more than 27 percent of all VC investment dollars in 2010, but in percentage terms fared less well in 2010. Biotechnology companies received $3.7 billion in VC investment, rising a modest 3.4 percent from 2009. In 2010, biotech companies ranked second among industries, overtaken by investments in software companies ($3.96 billion), which had ranked second in 2009. Medical device companies drew $2.3 billion in 2010, an 8.8 percent decrease from 2009. Only networking companies recorded a larger percentage decrease (-17.5%) in 2010.

Read more:

• Venture Investing Down in Q3, Up for Year-to-Date
• Financing Tips from Angel and VC Investors

Photo: Jorge Franganillo/Flickr

*     *     *