Venture Investing Sees A Weak 4Q, But 2011 Rebounds Smartly From 2010; Seed Funding Tumbles In Quarter: Slideshow

Venture investing fell in the fourth quarter to its slowest pace of the year, but capital commitments were enough to lift 2011 well above lethargic 2010.

Fourth-quarter deal making was particularly strong in cleantech and among biotechnology startups, but software, Internet, medical devices and IT services investing fell. Early-stage investing hit a high for the year. But seed funding tumbled 40%.

Investments for the quarter came to $6.57 billion with venture capitalists completing 844 deals, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters, publisher of this blog. The totals were down 10% in dollars and 11% in deals from the third quarter.

Software was the largest investment category with allocated capital down 16%. Internet investing fell a more precipitous 23%, and medical devices commitments stumbled 35%, the MoneyTree Report shows.

Cleantech activity hit a quarterly peak for the year, rising to $1.2 billion, up 34%. Cleantech investing for all of 2011 hit a record high at $4.3 billion, passing 2008 levels. Biotechnology investing rose 10% in the quarter.

Seed-stage investing of $134 million continued a year-long decline. For the year, seed funding fell 48% in dollars while deal volume was essentially flat. Early-stage investing was up for the quarter and the year. In the quarter, 2.3 billion went into 364 early-stage companies.

For the year, venture capitalists put $28.4 billion into 3,673 deals, an increase of 22% in dollars and 4% in deals, the MoneyTree Report found. The amount was the third highest in the past 10 years.

What follows are three charts with quarterly investment totals, investments by industry and top quarterly deals.


[slide title=”Fourth Quarter Investments Hit Low For Year”]

[slide title=”Software Is The Fourth Quarter’s Biggest Investment Category”]

[slide title=”Quarter’s Top Deals Include Dropbox, Better Place”]