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We found it! The Venture Rebound VCs may worry that too much cash is chasing too few good deals. But for entrepreneurs in a few key sectors, it's springtime for funding.
(FORTUNE Magazine) – Bubble Madness Is Over (Hallelujah!) The roller-coaster ride below is really a sector-by-sector breakdown of venture investment over the past seven years. We used data from VentureOne, a research firm, which tracks more than 100 sectors. We picked the five most funded sectors from each year and followed them for all seven years. Sector key --Information Technology --Health --Retail and Business Services VC sectors, listed by 2003 amount invested 1 Connectivity/communications tools [Information Technology] CONNECTIVITY/COMMUNICATIONS TOOLS Accel Partners, Intel Capital, and Microsoft are sharing in the latest round (a $38 million bet) for Beverly, Mass.--based Groove Networks, whose peer-to-peer technology creates secure, virtual workspaces that can be used by widely dispersed people. The Homeland Security Information Network uses Groove software. RECENTLY FUNDED $LATEST ROUND: LEAD INVESTOR Sonim Technologies $28 million: Accel Partners CipherTrust $42 million: Battery Ventures, Greylock 2 Biotechnology [Health] BIOTECHNOLOGY Favrille, a four-year-old, San Diego--based biotech that is developing a personalized cancer treatment made from a patient's own tumors, secured $44 million in funding in April. Two days later the company registered with the SEC for an initial public offering. In 2003 the company lost $13.3 million. Renovis $45 million: Easton Hunt Capital Partners Accorda Therapeutics $11.5 million: not disclosed 3 Nonfinancial business services [Retail and Business Services] NONFINANCIAL BUSINESS SERVICES Menlo Ventures, NEA, Alloy Ventures, and Deutsche Post Ventures handed over $20 million--plus in funding for Open Harbor. The San Carlos, Calif., company's software helps global businesses deal with ever-changing worldwide trade regulations. DHL is standardizing its customs processes with Open Harbor's software. MarkMonitor $22 million: Institutional Venture Partners 180solutions $40 million: Spectrum Equity Investors 4 Pharmaceuticals [Health] PHARMACEUTICALS CoTherix, the company formerly known as Exhale Therapeutics, raised a hefty $55 million this past fall around the same time it changed its name, got a new CEO, and acquired the rights to Berlin-based Schering AG's Ventavis, which treats pulmonary hypertension. A few weeks ago the company filed an IPO. One serious risk factor listed in the offering: no current source of product revenue. Critical Therapeutics $56 million: Advanced Technology Ventures, Johnson & Johnson Development Hypnion $47.5 million: Forward Ventures, MPM Capital 5 Application-specific integrated circuits [Information Technology] APPLICATION-SPECIFIC INTEGRATED CIRCUITS Mobius Venture Capital led a top-tier venture team to pony up $60 million last summer for Infinera, a startup that's quietly developing a low-cost optical chip for the telecom industry. So far Infinera has hit up investors for $130 million. Venture capitalist Vinod Khosla of Kleiner Perkins is a board member. Matrix Semiconductor $52 million: TeleSoft Partners Ikanos Communications $33 million: TL Ventures 6 Connectivity products [Information Technology] 7 Fiber-optic equipment; photonics [Information Technology] 8 Business applications software [Information Technology] 9 Telecommunications service providers [Information Technology] 10 Wireless service providers [Information Technology] 11 Specialty retail [Retail and Business Services] Where the Money Is Going The top three regions in 2003 (Silicon Valley, New England, and New York metro) together accounted for 55% of VC dollars invested and 49% of deals. Venture capital investments by region 2003, in millions North-west $558 Northern California $94 Silicon Valley $5,868 L.A./Orange County $984 San Diego $707 North-central $271 Midewest $874 Colorado $621 Southwest $281 Texas $1,166 South-central $83 Southeast $1,100 New England $2,764 Upstate N.Y. $120 New York metro $1,388 Philadelphia metro $555 D.C metro $792 Other U.S. $25 The most active venture investors in 2003 LOCATION NO. OF DEALS 1 New Enterprise Associates Baltimore 73 2 Draper Fisher Jurvetson Menlo Park, Calif. 52 3 Sevin Rosen Funds Dallas 50 4 Polaris Venture Partners Waltham, Mass. 48 5 U.S. Venture Partners Menlo Park, Calif. 47 6 Intel Capital Santa Clara, Calif. 43 7 Mobius Venture Capital Palo Alto 43 8 Austin Ventures Austin 42 9 Warburg Pincus New York 42 10 Venrock Associates New York 40 11 Advanced Tech. Ventures Waltham, Mass. 38 12 Mayfield Menlo Park, Calif. 37 13 St. Paul Venture Capital Eden Prairie, Minn. 37 14 J.P. Morgan Partners New York 35 15 TL Ventures Wayne, Pa. 35 SOURCE: PRICEWATERHOUSECOOPERS/VENTURE ECONOMICS/NVCA MONEYTREE SURVEY |
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