Venture-Capital Funding Drops as Clean-Energy Startups Get Less
Venture-capital funding in the third quarter fell to its lowest level in more than a year as investors made fewer bets on alternative energy.
Firms invested $4.82 billion in the U.S. during the period, down 7.3 percent from a year earlier and the least amount since the second quarter of 2009, the National Venture Capital Association and PricewaterhouseCoopers LLC said today in a report. The number of deals rose 8.9 percent to 780.
So-called clean technology companies, including makers of electric vehicles and solar power, received $625.2 million, a decline of 32 percent from the year-earlier period and less than half of the amount in the second quarter.
Funding of larger, more mature companies has slowed because venture capitalists are having trouble raising money, said Mark Heesen, president of Arlington, Virginia-based NVCA.
“It continues to be very hard for venture firms to raise money,” Heesen said in an interview. “That has to impact investments at some point.”
Software companies garnered $1 billion in third-quarter funding, the most of any industry and an increase of 25 percent from a year earlier. Biotechnology companies received the second-highest amount with $943.7 million, almost unchanged from the previous year.
Smart Grid
The biggest financing in the quarter was a $106 million round for Trilliant Inc., a Redwood City, California-based maker of equipment and software for smart-grid energy networks. Trilliant was funded by firms including Investor Growth Capital AB, MissionPoint Capital Partners and VantagePoint Venture Partners.
Venture-capital funding this year is expected to surpass 2009, NVCA said in a statement today. The total through the third quarter was $16.7 billion, compared with $18.3 billion for all of last year.
Small startups that require less money are getting funding, sometimes at the expense of companies looking to raise their third or fourth round, said Scott Sandell, general partner at venture-capital firm New Enterprise Associates in Menlo Park, California.
“Because of the rapid pace of innovation there are a lot of opportunities,” he said. “Good new companies are getting funded.”
To contact the reporter on this story: Douglas MacMillan in San Francisco at Dmacmillan3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
Rate this Page