Earlier this year, the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, released the results of its MoneyTree Report on venture funding for the second quarter of 2016. The report, which is prepared by the NVCA and PricewaterhouseCoopers LLP using data from Thomson Reuters, indicates that venture capitalists invested $15.3 billion in 961 deals in the second quarter, which constituted a 20% increase in dollars and a 5% decrease in deals as compared with the first quarter of 2016, when nearly $12.7 billion was invested in 1,011 deals (see chart below, which shows total venture funding from the third quarter of 2013 through the second quarter of 2016; data from MoneyTree Reports; click on chart to expand). The second quarter of 2016 was the tenth consecutive quarter in which more than $10 billion in venture capital was invested. However, as compared with the second quarter of 2015, invested dollars and deals were down 12% and 22%, respectively, in the second quarter of 2016.
In contrast with the increase in total funding, venture funding in the biotechnology sector decreased from $1.96 billion in the first quarter of 2016 to $1.69 billion in the second quarter of 2016 (see chart below, which shows venture funding for the biotech (blue), medical devices (red), and software (green) sectors since the third quarter of 2013; data from MoneyTree Reports; click on chart to expand). In addition to experiencing a 14% decrease in dollars, the biotech sector also saw a 19% decrease in deals, with 100 deals in the second quarter of 2016. Despite the decrease in dollars and deals, the biotechnology sector still received the second largest amount of venture capital for the quarter.
The software sector once again captured the top spot among the seventeen sectors tracked by the NVCA, collecting $8.74 billion in the second quarter of 2016 (up 70% from the $5.15 billion the industry picked up in the first quarter). The software sector has now captured the top spot for 27 straight quarters, with the biotech sector finishing second in all but five of those quarters. The software sector has also received more than $4 billion in funding for the tenth consecutive quarter.
Medical device and equipment investment increased by 3% with respect to dollars in the second quarter, with $539 million being invested. Ten of the seventeen sectors tracked by the NVCA remained flat or saw increases in dollars invested in the second quarter of 2016.
For additional information regarding this and other related topics, please see:
• "Venture Funding Reaches Highest Level in More Than a Decade," February 25, 2016
• "Third Quarter Venture Funding Declines 27% from Second Quarter," October 22, 2014
• "Software Sector Leads Pack in 2Q Venture Funding and Biotech Sector Finishes Second," July 20, 2014
• "Software Sector Leads First Quarter Venture Funding to Thirteen Year High; Biotech Sector Finishes Second (Again)," April 30, 2014
• "Biotech Venture Funding Rebounded in 2013 After Strong Fourth Quarter," January 26, 2014
• "Biotech Venture Funding Sees Second Quarter Rebound," July 22, 2013
• "Biotech Venture Funding Down 33% in First Quarter," April 30, 2013
• "Annual Venture Funding Drops for First Time in Three Years," February 4, 2013
• "Biotech Venture Funding Up 64% in Third Quarter," October 29, 2012
• "Venture Funding in Life Sciences Sector Drops 9% in Second Quarter," July 22, 2012
• "Biotech Venture Funding Drops 43% in First Quarter," May 3, 2012
• "Venture Funding Increased 22% in 2011," February 2, 2012
• "Life Sciences Venture Funding Drops in Third Quarter," October 27, 2011
• "Life Sciences Venture Funding up 37% in Second Quarter," August 1, 2011
• "VentureSource Reports 35% Increase in 1Q Venture Funding," April 26, 2011
• "NVCA Reports Modest Gains in First Quarter Venture Funding," April 19, 2011
• "NVCA Reports 31% Drop in Venture Funding for Third Quarter," October 17, 2010
• "NVCA Reports 34% Increase in Venture Funding for Second Quarter," July 22, 2010
• "NVCA Report Shows First Quarter Drop in Venture Funding," April 20, 2010
• "Biotech/Pharma Financing Improving, R&D Spending Up," August 31, 2009
• "NVCA Study Shows Increase in Third Quarter Venture Funding," October 23, 2009
• "First Quarter Venture Capital Funding at 12-Year Low," April 23, 2009
• "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009," February 16, 2009
