Venture capital firms provided a total of $8 billion of funding to start-up companies during the second quarter of 2011, marking a 5% decrease from the second quarter of 2010, Dow Jones VentureSource has reported.
The number of funding deals made between start-ups and venture capital firms also decreased by 2% between the two quarters. The healthcare sector experienced the greatest losses, with capital investments down 17% from Q2 2010, and deals down 12% from Q2 2010. The lone bright spot in the healthcare sector was in medical IT, where 19 deals worth $158 million amounted to a 27% increase in capital invested and a 58% increase in deals.
The success of IT companies was not limited to healthcare-specific firms. Overall, IT companies experienced a 9% increase in capital and a 5% increase in deals relative to 2010. Software companies – especially those targeting business applications and communication – accounted for more than half of the deal volume in the IT sector with 184 deals worth $1.2 billion.
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