Deals

VC investments hit $13B in Q2 — highest point since dotcom days

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VCs are feeling pretty enthusiastic right about now. At least, that’s what the latest data show. In fact, the $13 billion invested in the second quarter of 2014 marks the largest quarterly investment total since the $13.1 billion invested way back in the first quarter 2001.

All of this info is thanks to the MoneyTree Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters. The $13 billion invested in Q2 is spread across 1,114 deals, reflecting a 34 percent increase in money spent and 13 percent increase in the number of deals made when compared to Q1 of this year. At that time, the investment total was $9.7 billion across 985 deals.

Continuing on the trend set in the first quarter of this year, investments in the software industry remained strong and even saw an increase, hitting $6.1 billion. This is a 50 percent increase over the previous quarter. This large total can be blamed on two factors: Half of the ten biggest deals made in Q2 were made in software, and one of those deals was for $1.2 billion. This deal (Uber’s most recent funding round) was actually the largest quarterly deal included in the MoneyTree Report, ever. Like, in the entire history of the report!

Basically, tech is where it’s at. In a statement, Mark McCaffrey, technology partner at PwC, calls it a “megatrend” that “disrupt[s] entire industries by bringing the suppliers even closer to consumers.” VCs are passionately pursuing technology investments at greater frequency and for greater dollar amounts.

Following software was biotechnology, which saw $1.8 billion invested across 122 deals and media and entertainment, which saw $1 billion invested across 124 deals.

But it wasn’t all happy news for every industry reflected in the MoneyTree Report. Nine out of the seventeen industries covered incurred a decrease in investment dollars, most significantly, business products and services, which saw a 69 percent drop.

VentureBeat readers might be particularly interested to know that $2.7 billion was invested in 270 Internet-based businesses.

And the breakdown of investment types is as follows: a 46 percent increase in dollars invested for seed stage investments and a 17 percent increase in dollars invested for early stage investments. Seed deals averaged $3.4 million with early stage deals averaging at $7.3 million.

There was a 53 percent increase in money spent on expansions stage deals, averaging $18.7 million. And finally, the investment amounts for later stage deals increased by 25 percent and averaged $14 million.

The number of companies getting their first round of capital also increased by 20 percent and the amount they received increased by 48 percent. As you might suspect, software companies led the charge of those getting their first round of financing as well. Basically, it was a good quarter for venture capital all around.

For more information, you should read the full report, which is available now.