Venture capitalists invested $7.8 billion in 1,005 deals in third quarter 2013, according to a new report. That includes $445.7 million in the Washington, D.C. region.
The MoneyTree™ Report from PricewaterhouseCoopers and the National Venture Capital Association revealed that quarterly VC investment activity in the U.S. was up 12 percent in terms of dollars and 5 percent in the number of deals, compared to Q2 2013, in which $7 billion was invested in 956 deals. The dollar and deal totals for the first three quarters of 2013 are an increase from the same timeframe in 2012, but down from 2011.
In the Washington region, which includes Maryland, Virginia and West Virginia in addition to the District, investments were up 106 percent from the $216.2 million raised in Q3 2012, The Washington Post noted. Companies in the region have attracted a total of $1.15 billion since the start of the year, more money than the first three quarters of any year since 2001.
Nationwide, the software industry saw the biggest surge in funding in Q3, exceeding $3 billion for the first time in 12 years. Software saw the most deals in Q3 (420), up 23 percent from the previous quarter. Nine of the 11 largest investments during the quarter went to software companies.
Mark McCaffrey, global technology partner and software leader at PwC US, said in a statement that more venture capital dollars are going into software deals now than in the past decade. “The continued increase in valuations for innovative and disruptive technologies in software-related companies, coupled with the increase in exit activity, is driving venture capitalists to make more investments in this space,” he said. “And, at the current pace of investing, we should see total venture capital investments in 2013 exceed the annual total from 2012.”
The biotechnology sector was a distant second with $852 million invested in 123 deals, falling 39 percent in dollars but rising 10 percent in deals from Q2. The medical device industry came in third, with $566 million and 65 deals, a 12 percent increase in dollars but and 8 percent decline in deals.