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VC Investment Grows

SAN FRANCISCO and NEW YORK -- U.S. companies continued to attract significant venture capital investment in the second quarter of 2007, as venture financings reached $7.4 billion, an increase of 8% over the same period last year, according to the Quarterly Venture Capital Report released today by Ernst & Young LLP and Dow Jones VentureOne. The quarterly deal count also rose 8% to reach 717 deals, the highest deal volume since 2001.

This marks the ninth straight fiscal quarter of year-over-year growth in venture capital invested. One of the most notable trends of the quarter was the continued diversification in life sciences investments, particularly with medical devices, which saw investments skyrocket to $1 billion in 75 deals, the highest totals on record and 58% above the second quarter of 2006. Biopharmaceutical companies, the perennial favorites of health care investors, attracted $1.1 billion invested in 86 deals. Overall, health care companies received $2.4 billion in financing, a total second only to the $2.9 billion invested in the first quarter of 2007.

For more than two years, we’ve seen steady growth in the amount of venture capital invested and the promising liquidity markets—on the public exchanges for technology companies and primarily in mergers and acquisitions for health care companies—look to be driving investor optimism,” said Jessica Canning, Director of Global Research at VentureOne. “Health care continues to attract nearly one-third of all venture capital dollars and medical device companies, interestingly, are converging with biopharmaceuticals as a major draw for investors


Ernst & Young International