Venture Capital Investment in Startups Drops To New Lows
By Anna Johnson on April 21st, 2009In more evidence that venture funding for startups is down, research by the National Venture Capital Association and PricewaterhouseCoopers reveals that VC firms invested only $3 billion in 549 young companies in the first quarter of 2009. This is the lowest investment level since 1997.
The amount invested was 47 percent below the amount invested in the fourth quarter of 2008, and 61 percent below that invested in the first quarter of 2008.
The biggest decline was in clean-technology startups. In Q1 2009, venture capital firms invested $154 million in 33 companies. This was 84 percent below the amount invested in the fourth quarter and the lowest amount since 2005.
Meanwhile, VCs invested $556 million in Internet companies, down 31 percent from the year before. The biggest investments were mobile phone payment service, Obopay, and Twitter, the microblogging site, which each raised $35 million.
Source: Claire Cain Miller, “Venture Capital Investment Sinks,” The New York Times, April 18, 2009
