Around the world, venture capital investments are seeing a marked uptick — a 13% increase in investments was made in Q1 2010 alone. In all markets except Europe, VC seems to be slowly crawling up from the all-time lows of the recession.
Earlier this month, we showed you a report that confirmed VCs were getting more funds than they had received since the beginning of the 2008 market crash. We wondered if this recovery would trickle down to investments in tech startups. Today’s report from Dow Jones gives us more cause for optimism — while Q1 2010 amounts and deals aren’t as rosy as the figures seen in Q4 2009, year-over-year numbers show a definite if modest rise.
Not only are VCs’ funds being replenished, they’re also making more deals than they were in previous quarters. Globally, 919 venture capital deals were inked in Q1 2010. These investments totaled $7 billion. The U.S. market accounted for the majority of both deals made (65% of the worldwide total) and dollars invested (67%).
The data show that in the U.S., tech deals account for more of the total than other types of investments, and that the trend toward smaller, more cautious dollar amounts for financing rounds continues.
Year-over-year, VC in the U.S. is showing progress. Q1 2009 is when the bottom fell out of private equity investing and now we’re seeing a slow and gradual return to healthier, pre-recession numbers.
We took a closer look at the numbers as they concern investments in technology, and here’s what we found:
Overall, tech investments account for more investment dollars than any other type of investment. This year, tech investments rose to surpass healthcare investments, which had previously garnered more venture capital than any other category (amounts shown in millions):
And tech investments in the U.S. grew YOY from $1.3 billion to $1.5 billion, making the U.S. far and away the largest source of VC for tech companies.
Overall, tech investments are looking better in the U.S. than elsewhere around the globe with one possible exception: the size of the deals. Median round size for all investments in the U.S. fell by about a half million dollars between Q1 2009 and Q1 2010; round sizes elsewhere in the world rose universally. We don’t have data on whether this applies specifically to tech deals, but we do know that inking smaller deals is a trend we’ve seen throughout 2009.