Good News from the VC World

The U.S. venture-capital industry showed signs of recovery in the second quarter as venture capitalists invested $5.27 billion in 595 deals, according to Dow Jones VentureSource.
The second-quarter total is still dramatically lower than the $8.33 billion put into 726 deals during the year-earlier period. But it’s a 32 percent improvement over this year’s first quarter, which saw the lowest quarterly investment since 1998, with $4 billion invested.

“As the venture-capital industry’s rebound gains traction, we’re seeing a new landscape emerge,” said Jessica Canning, director of global research for Dow Jones VentureSource. “Investors are diversifying their portfolios away from traditional investment areas like biopharmaceuticals and software toward segments like medical devices and information services, while also pulling back on how much they are willing to invest in each deal.”
The health-care industry saw $2.23 billion invested in 184 deals completed in the second quarter. That’s a 14 percent decline from a year earlier, when $2.6 billion was put into the same number of deals. It’s the first time on record that health-care investment outpaced investment in information technology, which attracted $1.88 billion in the latest quarter.
As usual, California dominated venture-capital activity in the second quarter, representing 42 percent of the nation’s deal flow and 46 percent of the capital invested.