Investment in IT reaches £1.7bn in first quarter
Venture capital (VC) investment in IT totalled $3bn (£1.7bn) in the first quarter of 2006, according to new research.
The figure is slightly down from the same quarter last year when $3.2bn (£1.8bn) of investments were made in the technology sector, according to a report from Datamonitor.
The area that has attracted most attention is wireless technology, which received $216m (£123m) of investment in the first three months of 2006.
The Datamonitor report shows that while the value of total investments has gone down slightly, the overall number of deals has risen significantly.
Frederic Court, a partner with London-based technology VC firm Advent Venture Partners, says this increase in deals can be attributed to pre-dot com boom levels of confidence returning to the market.
‘There is definitely a trend towards earlier stage deals. It has been very hard for entrepreneurs to raise early stage cash after the bubble deflated between 2001 and 2004,’ he said.
‘We see confidence rebuilding; people are more ready to take early stage risks again.’
Patrick Sheehan, a partner at international venture capital firm 3i, says VCs are communicating well at the moment but warns this can result in technologies being overhyped.
‘Information does spread very rapidly, so there is a danger of over-reacting, of over-enthusiasm, but good VCs talk to each other to know what is going on,’ he said.
‘For instance, we have been investing in wireless for a long time, because Europe has been very strong in that.’
Datamonitor technology finance analyst Tom Jowitt believes debates over future standards help fuel investment, which is highest in the wireless sector at the moment.
‘The wireless sector for the past four or five months has been a fairly consistent target for the VC community,’ he said.
‘There is a huge debate going on at the moment on the wireless side: is it going to be WiMax, is it going to be WiFi?
‘We have been seeing a lot of investment going into content providers and even location-based services for mobile phones,’ said Jowitt.
VC investment
Total declared investment by VCs in technology in Q1 2006 was £1.7bn.
Wireless technologies saw the most investment with $216m (£123m) invested.
Venture capital (VC) investment in IT totalled $3bn (£1.7bn) in the first quarter of 2006, according to new research.
The figure is slightly down from the same quarter last year when $3.2bn (£1.8bn) of investments were made in the technology sector, according to a report from Datamonitor.
The area that has attracted most attention is wireless technology, which received $216m (£123m) of investment in the first three months of 2006.
The Datamonitor report shows that while the value of total investments has gone down slightly, the overall number of deals has risen significantly.
Frederic Court, a partner with London-based technology VC firm Advent Venture Partners, says this increase in deals can be attributed to pre-dot com boom levels of confidence returning to the market.
‘There is definitely a trend towards earlier stage deals. It has been very hard for entrepreneurs to raise early stage cash after the bubble deflated between 2001 and 2004,’ he said.
‘We see confidence rebuilding; people are more ready to take early stage risks again.’
Patrick Sheehan, a partner at international venture capital firm 3i, says VCs are communicating well at the moment but warns this can result in technologies being overhyped.
‘Information does spread very rapidly, so there is a danger of over-reacting, of over-enthusiasm, but good VCs talk to each other to know what is going on,’ he said.
‘For instance, we have been investing in wireless for a long time, because Europe has been very strong in that.’
Datamonitor technology finance analyst Tom Jowitt believes debates over future standards help fuel investment, which is highest in the wireless sector at the moment.
‘The wireless sector for the past four or five months has been a fairly consistent target for the VC community,’ he said.
‘There is a huge debate going on at the moment on the wireless side: is it going to be WiMax, is it going to be WiFi?
‘We have been seeing a lot of investment going into content providers and even location-based services for mobile phones,’ said Jowitt.
VC investment
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