Deals

VC investments drop in Q2, but funding for early-stage companies grows

Venture capital investments totaled $7 billion across 898 deals during the second quarter, down 12 percent from the same quarter a year ago. But investing in early stage companies grew to the highest level since early 2001.

The figures come from the MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association. A year ago, the numbers amounted to $8 billion invested in 1,057 deals. The second quarter was up 17 percent in dollars and 11 percent in deals from the first quarter.

VCs invested $2.1 billion in 410 early-stage deals. The association said those deals are critical to the U.S. innovation pipeline. For the first six months of the year, venture investment nationally was $13.1 billion, down from $14.7 billion a year earlier. Overall, VC investments in the U.S. are expected to exceed the $23 billion invested in 2010. Still, the numbers are likely to fall short of last year’s $30 billion.

Software is still the No. 1 sector of investment, drawing $2.3 billion in the quarter. Internet companies raised $1.8 billion in 261 deals. Life sciences drew $1.4 billion. Biotech drew $696.8 million.

Seed-stage companies received $199.4 million across 63 deals, down from $422.8 million in 130 deals. Later stage deals amounted to $2.09 billion across 193 deals, compared with 274 deals that raised $2.97 billion a year ago.

Silicon Valley continued to dominate the scene. New England companies got $843 million during the period. New York drew $568 million in the quarter. Washington state got $235 million invested in 25 deals.

The top 10 deals of the quarter are here:

1. Fisker Automotive, electric car maker: $147.6 million

2. Harvest Power, turns organic waste into natural gas and fertilizer : $112 million

3. Bloom Energy, developer of small, natural-gas powered fuel cells: $100 million

4. Pinterest, image-sharing website: $100 million

5. Castlight Health, health care shopping portal: $99.99 million

6. Skybox Imaging, provider of satellite imagery, video, and data analytics: $70.2 million

7. Qualtrics Labs, provider of online survey software: $70 million

8. Quora, question-and-answer site: $60 million

9. SunRun, provider of residential solar electricity: $60 million

10. Palantir Technologies, developer of data analysis software: $56.1 million

[Image credit: Flickr: Philip Taylor]

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