PRINT THIS PAGE US venture capital investment increased to $7.4bn in Q2 from $6.9bn in Q2 last year25/07/2007. Source: AltAssets. 
US companies attracted $7.4bn of venture capital investment in the second quarter of 2007, an increase of eight per cent over the same period last year, according to the Quarterly Venture Capital Report released by Ernst & Young and Dow Jones VentureOne. The quarterly deal count also rose eight per cent to reach 717 deals, the highest deal volume since 2001. IT companies accounted for the largest slice of the venture capital pie in the second quarter, attracting ten per cent more capital than during the same period last year with $4.1bn invested in 435 deals. As has been the case since 2002, software received the bulk of IT investment, this time with 179 deals accounting for $1.5bn. Though deals are down eight per cent, this is on par with the amount invested in software companies in the second quarter of 2006.
Healthcare companies received $2.4bn in financing, a total second only to the $2.9bn invested in the first quarter of 2007.
For business, consumer and retail companies, deals and investment declined from a year ago, the quarterly data showed. There was $519m invested in 61 of these companies in the first quarter of 2007, down from $557m and 62 deals during the same period in 2006.
'For more than two years, we have seen steady growth in the amount of venture capital invested and the promising liquidity markets - on the public exchanges for technology companies and primarily in mergers and acquisitions for healthcare companies - look to be driving investor optimism,' said Jessica Canning, director of global research at VentureOne. 'Healthcare continues to attract nearly one third of all venture capital dollars and medical device companies, interestingly, are converging with biopharmaceuticals as a major draw for investors.'
The quarterly report also highlights the trends of larger deal sizes and more money going toward second-round and later stage investments. The median deal size in the second quarter of 2007 reached $8m, up from the $7.4m seen during the same time last year and the highest median seen since 2000. By industry, healthcare financings had the largest medians at $9m, followed by IT at $8m and business, consumer and retail at $4.9m.
By round class, deals were up across all stages. Early stage deals accounted for 36 per cent of overall deal flow with 254 financings in the second quarter, up 17 per cent from the same period in 2006. Later stage financings made up 41 per cent of the total with 253 financings, the largest number of deals in more than six years. Second rounds accounted for 23 per cent with 160 deals, the highest total since 2002.
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