US venture investments declined in 2012 (Update)

Jan 18, 2013 by Barbara Ortutay

A new study shows that funding for U.S. business startups declined in 2012, the first time that's happened in three years, as venture capitalists spent less money on fewer deals.

Capital-intense sectors like clean technology and life sciences were among the hardest hit, according to the MoneyTree study released Friday. It was conducted by PriceWaterHouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.

In all of 2012 startup investments fell 10 percent to $26.52 billion from $29.46 billion. There were 3,698 deals completed, down 6 percent from 3,937 in 2011. Venture investments also declined 13 percent in the final quarter of the year, to $6.4 billion from $7.38 billion a year earlier, though the number of deals was the same in both quarters at 968.

"General economic uncertainty continues to hinder capital investments, and venture capitalists are no different," said Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC U.S. "As the number of new funds being raised continues to shrink, venture capitalists are being more discriminating with where they're willing to place new bets. At the same time, they're holding on to reserves to continue to support the companies already in their portfolio."

By industry, software remained the largest investment sector last year, the report found, with $8.27 billion invested into 1,266 deals. That's up from $7.51 billion invested in 1,176 deals in 2011.

San Francisco's SquareTrade Inc., which provides electronics warranties, landed the biggest round of funding in 2012—$238 million from Bain Capital. Mobile payments startup Square Inc. was in second place with $200 million secured from Citi Ventures and others.

Explore further: Alibaba surges in Wall Street debut (Update)

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Venture capital investments up 19 percent in 4Q

Jan 20, 2012

(AP) -- Funding for startups rose 19 percent in the fourth quarter as venture capitalists fueled money into more companies in the Internet, clean technology and other sectors.

Venture funding, number of deals decline in 3Q (Update)

Oct 19, 2012

Funding for startups declined 12 percent in the July-September period as venture capitalists spent less money on fewer deals, according to a new report. Companies in the early stages of funding saw declines as investors stayed ...

US venture funding falls 12 percent in 2Q to $7B

Jul 20, 2012

(AP) — Funding for startups fell 12 percent in the April-June period as U.S. venture capitalists poured less money into fewer deals than a year earlier. But the number of companies getting funded in the earliest stages ...

Venture-capital investments down 33 pct in 3Q

Oct 20, 2009

(AP) -- Venture capitalists' investments in U.S. startups rose in the third quarter when compared with the first two quarters of the year, suggesting increased confidence in the economy. When compared with the year-ago period, ...

Venture capital investments decline in 4th qtr

Jan 22, 2010

(AP) -- Venture capitalists invested less money in U.S. startups in the fourth quarter and showed signs of spreading out those fewer dollars among more companies, reflecting continued caution amid uncertainty about the economy.

Recommended for you

Alibaba makes Wall Street debut

Sep 19, 2014

Alibaba made its long-awaited Wall Street debut Friday on the heels of a record stock offering that opens the door to global expansion for the Chinese online retail giant.

Alibaba IPO to boost employee fortunes to $8 bn

Sep 19, 2014

Employees of Chinese e-commerce giant Alibaba will see their fortunes swell to nearly $8 billion as the company prepares a massive US stock offering that could be valued at $25 billion.

Alibaba mega IPO caps founder Jack Ma success tale

Sep 19, 2014

When Jack Ma founded Alibaba 15 years ago he insisted the e-commerce venture should see itself as competing against Silicon Valley, not other Chinese companies. That bold ambition from a time when China was ...

User comments : 0