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Investing January 22, 2008
Venture Capital Investment Climbs to Highest Level Since 2001
January 22, 2008 (PLANSPONSOR.com) - Venture capital
investment in U.S. companies continued to climb in 2007 with
the most deals and capital invested since 2001, according to
the Quarterly Venture Capital Report released today by Dow
Jones VentureSource.
Reported by Rebecca Moore
The total deal count reached 2,648 for the year, slightly ahead of 2006, and capital investment reached $29.9 billion – an 8% increase over last year, according to a Dow Jones press release. The year finished strong, as the fourth quarter saw 650 deals completed and $7.3 billion invested – a 6% increase in the deal count and 15% growth in investment from a year earlier.
By industry, investments in energy, environmental, and advanced specialty chemicals and materials companies saw the most significant growth in deal flow and investment in 2007, the press release said. The deal count for these companies reached 187 in 2007, up from 124 in 2006, and investment grew 67% to $2.5 billion.
The health care industry also saw significant growth, recording a new annual investment record with nearly $10 billion put into 671 deals – a 17% increase over the $8.5 billion invested in 662 health care deals in 2006. The overall median deal size for a health care company grew to a record $10 million in 2007, up 33% from $7.5 million in 2006.
Within the health care industry, both the biopharmaceutical and medical device segments attracted record amounts of venture capital. There was $5.4 billion invested in 327 biopharmaceutical deals, up 12% over 2006, and nearly $3.7 billion put into 251 medical device deals, a nearly 37% increase.
The information technology (IT) industry posted a modest 2% gain in investments over 2006, with $14.8 billion invested in 1,530 deals, seven fewer than the previous year.
The business, consumer, and retail sector saw a nearly 20% decline in investments from 2006. Investors put roughly $2.6 billion in 260 deals in this area, down from $3.2 billion invested in 293 deals last year.
By region, California was again the top destination for venture capital investment in 2007, accounting for 42% of all deals with 1,112 and 47% of all capital invested with just under $14 billion. The Boston area also turned in a strong year, with venture capitalists investing $3.7 billion in the area, 19% more than 2006.