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Global venture capital investment in Web 2.0 companies increases to $850m in 200621/03/2007. Source: AltAssets. 
 Venture capitalists around the world invested $844.4m into 167 Web 2.0 deals in 2006, more than twice as much capital and nearly twice as many deals as occurred in 2005, according to Ernst & Young and Dow Jones VentureOne.
'Web 2.0 is certainly a very fast-growing segment of the overall venture capital market right now. However, based on the median size of Web 2.0 deals and the conservative level of pre-money valuations for these companies, the data does not indicate that we are entering bubble territory,' said Stephen Harmston, director of global research for VentureOne. 'Rather, what we are seeing is robust investment activity aimed at a still emerging business area.'
The median pre-money valuation for a Web 2.0 company in 2006 was $6m for both US-based companies and worldwide. This is considerably more modest than the $18.5m overall median pre-money valuation reported for US venture-backed companies and also below the $7m overall median pre-money valuation for European venture-backed companies, the report found.
The median size of a Web 2.0 deal on a global basis was $5m in 2006, an increase from the $3.3m median the year before. The median size of a financing round was also $5m in the US and China, but was actually higher in Europe last year at $6m.
The US dominated the Web 2.0 market, with 126 deals and $682.7m invested, an 83 per cent increase in deals from 2005 and a 136 per cent increase in capital.
Copyright © 2007
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