The Joplin Globe, Joplin, MO

Business

July 20, 2012

Venture funding falls 12 percent in 2Q to $7B

NEW YORK — Funding for startups fell 12 percent in the April-June period as venture capitalists poured less money into fewer deals than a year earlier. But the number of companies getting funded in the earliest stages of development reached the highest level in more than a decade — a hopeful sign for the broader economy and an indication that investors are willing to wait for returns.

A report due out Friday says that startup investments slipped to $7 billion in the second quarter, down from $8 billion in the same period a year earlier. The companies getting funded were mainly in the software, Internet, industrial, and energy sectors. There were 898 deals completed during the quarter, down 15 percent from 1,057 a year earlier.

The MoneyTree study was conducted by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters. The study tracked four stages of venture capital funding. Depending on how far along companies are in development, they received either “seed”, “early”, “expansion” or “later-stage” funding.

Compared with the first quarter, both the amount of VC money and the number of overall deals increased. The April-June quarter saw most early-stage deals completed since the first quarter of 2001, with $2.1 billion going into 410 deals.

“That’s really the bread and butter for VCs and hopefully a harbinger for good economic news for the country overall,” said Mark Heesen, president of the NVCA. “If we’re investing in early stage, that means we have some time and money that we didn’t have in the recent past.”

Many early-stage companies don’t make it. Those that do become big job creators, he added.

Still, there are concerns among venture capitalists. Investments in the life sciences are falling. In the second quarter, venture capital firms poured $696.8 million into biotech startups, less than half of the $1.44 billion they invested a year earlier. Heesen explained that the time it takes a drug to get to market in the U.S. is getting longer —often more than 10 years. That makes funding difficult, even for patient investors.  

Among the study’s other notable items:

— Internet companies received the second-highest level of investment in more than a decade, with $1.8 billion going into 261 deals.

— Seed-stage companies received less than half of the funding that they did a year ago, with $199.4 million going into 63 deals. That’s down from $422.8 million going into 130 deals.

— Three of top four deals were in the industrial and energy sectors. Electric car maker Fisker Automotive received $147.6 million, Harvest Power, a provider of organic waste management services, got $112 million and fuel cell technology company Bloom Energy, which develops small, natural-gas power generators for offices and factories, received $100 million.

— Pinterest Inc., the popular image-sharing website, tied for third place with $100 million in funding.

— Startups in the expansion stage received a total of $2.62 billion going into 232 deals, down from 272 deals and $2.38 billion a year ago.

— There were 193 later-stage deals during the quarter, totaling $2.09 billion. That’s down from 274 deals and $2.97 billion in the second quarter of 2011.

 

1
Text Only
Business
  • Express Scripts expansion could mean 1,500 jobs

    The nation’s largest company that manages pharmacy benefits is opening a new office building in St. Louis County as part of an expansion expected to add 1,500 jobs over the next few years.

    July 28, 2014

  • 5 things to know about coal trade, global warming

    As the Obama administration weans the U.S. off polluting fuels blamed for global warming, energy companies have been sending more of America’s unwanted energy leftovers to other parts of the world where they could create even more pollution.

    July 28, 2014

  • US rig count up 12 to 1,883

    Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose 12 this week to 1,883.

    July 25, 2014

  • Business Visa, Amazon pull stock market lower

    Disappointing news on the American consumer, reflected in the results of retail giant Amazon and credit card processor Visa, dragged down the stock market Friday, putting two major indexes on course for a weekly loss.

    July 25, 2014 1 Photo

  • Aviations Bad Week.jpg Very bad week: Airline disasters come in a cluster

    Nearly 300 passengers perish when their plane is shot out of the sky. Airlines suspend flights to Israel’s largest airport after rocket attacks.

    July 24, 2014 1 Photo

  • Dave Ramsey: Keep hands off the 529 money

    Should we use money from our son's 529 plan for college to pay off debt?

    July 24, 2014

  • New Jersey sues over Florida pizza shop logo

    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the Garden State Parkway’s green and yellow signs.

    July 24, 2014

  • Laclede Group gets nod to buy Alabama company

    The Alabama Public Service Commission this week voted to approve the acquisition of Alabama Gas Corp. by The Laclede Group from Energen Corp.

    July 24, 2014

  • France: Air Algerie flight vanishes over N Mali

    An Air Algerie flight carrying 116 people from Burkina Faso to Algeria’s capital disappeared from radar early Thursday over northern Mali after heavy rains were reported, according to the plane’s owner and government officials in France and Burkina Faso.

    July 24, 2014

  • Business US stocks rise as investors weigh earnings

    Stocks mostly rose in early trading Thursday as several big companies across industries reported second-quarter earnings, including Facebook, Ford and equipment maker Caterpillar.

    July 24, 2014 1 Photo

Poll

A new provision by the U.S. Department of Agriculture allows qualifying districts with high percentages of students on food assistance to allow all students to eat free breakfasts and lunches. Would you agree with this provision?

Yes
No
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming UN Security Council Calls for Gaza Cease-fire Traditional African Dishes Teach Healthy Eating 13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow Raw: Deadly Tornado Hits Virginia Campground