Report: Venture capital for 'Net startups flat in '08

Internet-based and software companies held their own in 2008 among businesses receiving venture capital money, bucking the overall trend of fewer available venture dollars.

Companies that depend on the Internet held their own for the year, garnering US$4.9 billion vs. $5 billion the previous year, accounting for 17 percent of overall investment, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.

Software companies represented the largest single category of investment sectors in both the number of dollars invested and the number of deals (881). But they still took a venture hit in 2008, with investments of US$4.9 billion representing a 10 percent decline from 2007.

Only two tech-sector companies companies made the top 10 list for most money received in 2008. One was Pocket Communications Northeast, a flat-rate cell-phone network provider with service in parts of he US, that took in US$100 million.

Reardon Commerce also took in US$100 million for its software-as-a-service business that provides an online personal assistant that can handle business conferencing, shipping, travel, dining and events for its customers by tapping into its network of partner vendors.

In the fourth quarter, i/o Data Centers, a data center collocation provider, landed US$56 million to expand its business, ranking it among the top 10 recipients for the quarter.

From a broader perspective, young start-ups and clean technology reaped a bumper crop of venture capital money in 2008, a year that saw overall venture funding drop 8 percent compared with 2007, according to a quarterly summary of investment activity.

Seed-stage investments reached their highest level since 2000, jumping up 19 percent over 2007, capturing US$1.5 billion.

Seed-stage companies also represented 57 percent of all companies receiving venture money for the first time.

For the year, clean technology companies -- solar energy and batteries -- pulled down US$4.1 billion in 2008, a 57 percent increase over 2007, and accounting for 15 percent of all dollars invested by venture firms for the year, the study says.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Venture capital

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tim Greene

Network World
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?