2006 Web 2.0 VC investment soars

March 21, 2007

Unsurprising news that investment by VC’s in Web 2.0 start-ups has soared in 2006. We’re looking at a figure of double the investment received by start-ups in 2005. That’s a huge increase, but then there were some rather large deals last year…

Facebook ($25 million), Zillow ($25 million), PodShow ($15 million), Zimbra $14.5 million), Veoh Networks ($12.5 million), Six Apart ($12 million), Kayak.com ($11.5 million), Revver ($10 million), NetVibes ($14.4 million), Where Are You Now? ($9 million) , and Toodou ($8.5 million). That’s just a selection as well…

Actual numbers of deals were was 167 last year. It would be really interesting to know how many of those have joined the deadpool since…

More details from Prime NewsWire:

  • The U.S. dominated the Web 2.0 market, with 126 deals and US$682.7 million invested, an 83% increase in deals from 2005 and a 136% increase in capital.
    — On a sub-regional basis, the San Francisco Bay Area was the busiest region in the U.S. for Web 2.0 deals and was home to more than half of all financings last year. The New York metropolitan area, Southern California and New England also saw tremendous growth in deal flow and investment over 2006.
  • Europe has also shown significant interest with 20 deals in 2006, up from four deals in 2005. The amount invested in Europe, US$100.5 million, is more than a 200% increase from 2005.
    — Within Europe, France posted the most activity with seven deals and US$39.3 million invested in 2006.
    — Five Web 2.0 deals were completed in the United Kingdom last year, raising US$23.4 million in investment capital.
  • China posted 21 Web 2.0 deals. This was the same number that occurred in China in 2005 — indicating a flattening of that market. Investment declined by 26% to US$61.3 million.
  • Israel had two venture-financed Web 2.0 deals in 2006 and US$22 million invested, a jump from one deal and only US$1 million invested the year before.
  • The most active investors in Web 2.0 on a worldwide basis are Benchmark Capital, Draper Fisher Jurvetson, Sequoia Capital, and Omidyar Network.

One Response to “2006 Web 2.0 VC investment soars”

  1. Francesco DeParis Says:

    As unlikely as it seems from the outset, I think traditional media companies (TMC) will ultimately rule the web 2.0/New Media space. TMCs will surely become the next VCs.

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