Venture Capitalists Invest $4.2 billion in Third Quarter

October 28, 2003 (—During the third quarter venture capitalists invested $4.2 billion in 148 companies, a decline of 8% from the second quarter, according to the PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree Survey.

This was the fifth consecutive quarter, beginning with the third quarter of 2002, to see venture capitalist investments around $4 billion.

Biotechnology displaced Software as the sector attracting the most money from venture capitalists, receiving $873 million, an increase of 31% from the previous quarter and 88% from a year ago.   Life Sciences, a larger sector, including Biotechnology and Medical Devices & Equipment, drew $1.24 billion, or 30% of dollars invested, the PwC/TVE/NVCA MoneyTree Survey reported.

Other sectors attracting investment included:

  • Software ($819 million)
  • Telecommunications ($492 million)
  • Medical Devices ($376 million)
  • Networking ($331 million)

First-time investment remained steady to that of previous quarters, with 22% of all companies receiving $766 million.  

Of the first-time investment dollars:

  • 28 Software companies received $138 million
  • 16 Biotechnology companies received $72 million
  • 15 Medical Devices companies received $54 million.
  • Seven Telecommunications companies and six Networking companies received first-time investment.

More than half of the investments made by venture capitalists went to expansion stage companies, later stage companies received 22% of all money invested and 20% of investments went to early stage companies according to the PwC/TVE/NVCA MoneyTree Survey.

Alison Cooke