SAN JOSE – Venture capital investments in the U.S. teetered in the second quarter of 2012, but semiconductor deals got a significant boost, according to the latest figures from Dow Jones VentureSource.
U.S.-based companies raised $8.1 billion through 863 venture capital deals in the second quarter, said VentureSource. That’s a nine percent decline in value from the same period in 2011, but up from $7.2 billion in the first quarter of this year.
VCs placed $250 million in 18 semiconductor deals in the second quarter. That’s up solidly from $113 million in 13 deals in the first quarter, $92 million in the prior period and $165 million in the second quarter of 2011.
Two large late-stage rounds drove the uptick. Quantenna Communications closed a $79 million round and Aquantia raised $40 million. Silicon investments have generally been on a decline, hitting a level of $1.3 billion in 2008.
"Since 2009, VCs have been heavily focused on later-stage investments in the semiconductors sector, so every so often you’ll see a few big, later-stage rounds close in the same quarter and inflate the statistics a bit," a VentureSource spokeswoamn said.
Other electronics hardware investments did not fare as well. Spending in communications and computers declined to $233 million and $296 million from $344 million and $332 million in the first quarter, respectively. Overall the comms and computing segments are on track to continue the trend since 2008 of hovering at about $1 to $1.5 billion a year.
The move to cloud computing is fueling some activity in electronics hardware. In the first half of this year data storage companies accounted for 16 percent of hardware deals, VentureSource said.
Software investments continue to be the bright light in the broader IT area. The sector received $1.6 billion in VC money in the second quarter, up from $1.3 and $1.1 billion in the two prior quarters.
The medical device segment declined to $652 million in 67 deals in the second quarter from $752 million in 75 deals in the prior quarter. Spending was down by a third from the second quarter of 2011, however the field is poised to maintain the roughly $3 billion level it has maintained since 2008.
In the first six months of 2012, VCs invested $15.3 billion in 1,595 deals, a seven percent decline in capital and five percent decline in deals from the first half of 2011, VentureSource reported. The energy sector was the big loser, tumbling 56 percent from the same period last year to $293 million. But the sector came off a huge first quarter when VCs pumped $1.8 billion into the area.
“IT and Internet investment has been steady but interest in capital-intense industries like healthcare and energy is fading,” said Brendan Hughes, director of information analysis for VentureSource, speaking in a press release. “In energy, investors are favoring smaller technology plays rather than big investments in solar or biofuels,” he added.
The median amount invested in a financing round was $5 million in the second quarter of 2012, on par with the same period last year.
Successful IPOs of Yelp, Brightcove and LinkedIn fueled interest in the Internet sector despite the high-profile stock price declines of Groupon, Facebook and Zynga, VentureSource said. Investments in sector rose to $967 million raised in 134 deals during the second quarter, a 27 percent increase in money and a 14 increase in deals from the same period last year.
The median amount invested in a financing round was $5 million in the second quarter of 2012, on par with the same period last year.