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Tuesday, August 29, 2006

Positive Trends In Venture Financings

The just released trends in venture funding show growth and point to more activities.
U.S. venture industry related results for Q2 shows amongst other things:
- The amount invested by venture capitalists in the U.S. in 2Q06 was approximately $6.7 billion, against $6.4 billion in 2Q05 and $6.2 billion in 1Q06. The combined total of $12.9 billion for the first half of 2006 puts the industry on pace for its largest investing year since 2001.
- Acquisitions of venture backed companies in the U.S. in 2Q06 was approximately $7.1 billion in 92 transactions. This was a decline from $8.5 billion/97 transactions and $8.4 billion/103 transactions in 2Q05 and 1Q06, respectively, although the combined total of $15.5 billion/195 transactions for the first half of 2006 puts the industry on pace for its best acquisitions year since 2000.
- There were 16 IPOs of venture backed companies in the U.S. in 2Q06, raising $1.3 billion. The total of 29 IPOs raising $1.9 billion in the first half of 2006 puts the industry on pace to have its best IPO year since 2000, other than 2004 when 67 IPOs raised $5 billion.

Ofcourse these numbers by nature cover such a large variety of transactions bundling in all types of transactions – seed to late stage and leading to exits. It is clear that going by the activity levels , lot of startups are getting funded. The ripple effect could be felt continents away. While on this also look at the evolution and activity levels in a very hot market – India here and here . Battery ventures Mark Sherman believes that India would become one of the core venture hub shortly : silicon valley, Route 128, Israel etc. While there are some genuine concerns about what can come out of such a deluge of funds chasing the country, clearly good times lay ahead for entrepreneurs and the tech ecosystem. Also to note is that there is a clear private equity wave felt around the world.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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