VC Funding for Software Jumps in MoneyTree Report, and Top 10 Deals

the sector that received the most capital during the quarter was Information Technologies (28 percent, or nearly $2.3 billion). In the MoneyTree Report there is no Information Technology category per se; those deals are instead counted under software or IT services.

Nevertheless, the overall trends are roughly comparable, and each survey is showing a slight upward trend in overall venture activity.

“I think deals are picking up because of the opening of the IPO window,” said Jay Lichter, a partner at San Diego’s Avalon Ventures who specializes in the life sciences. “This really changes the dynamic of fundraising and more importantly exits [for venture-backed startups].”

According to the MoneyTree Report, the software industry grabbed the most funding during the quarter, at $3.6 billion, and nine of the 11 biggest rounds involved software deals. It was the first time in twelve years that venture funding for software startups exceeded $3 billion in a single quarter. Software also accounted for the most deals—420—up 23 percent from the 342 deals counted in the second quarter of 2013.

“Software is a natural increased area of focus given that many tech deals are less capital intensive to get to proof of concept,” said John Taylor, the NVCA’s head of research, in a statement today. Taylor said he also was encouraged by the fact that seed and early stage deals accounted for more than half of the investment activity.

“We are balancing this optimism, however, against the recognition that VCs are still trying to gain exits for

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.