Tech start-up funding revealed

feature-money-pipe-thumbIf you want to secure investment for a technology start-up, it’s natural for your gaze to instinctively settle across the Pacific upon Silicon Valley.

 

However, new figures show that while the US retains a huge chunk of the online venture capital market, the money is thinning out and beginning to spread.

 

As we reported today, a MoneyTree study, conducted by PricewaterhouseCoopers and the National Venture Capital Association, found that American tech start-up investments fell to $7 billion in the second quarter, down from $8 billion in the same period a year earlier.

 

Meanwhile, seed-stage companies received less than half of the funding that they did a year ago, with $199.4 million going into 63 deals. That’s down from $422.8 million going into 130 deals.

 

Meanwhile, new global figures from online investment group Right Click Capital show that while the number of deals is increasing, the total amount of cash pumped into start-ups has fallen from the second quarter of 2011 compared to the same period this year.

 

Description

Q2 2011

Q2 2012

Number of deals

454

1,007

Total deal value

$28,628,170,169

$29,052,613,700

Average deal value

$96,716,791

$43,819,930

Total investment value

$7,164,933,239

$7,180,513,700

Total acquisition value

$21,463,236,930

$21,872,100,000

 

Below are some of the key findings from Right Click Capital’s latest Internet DealBook, which tracks all publicly-announced funding deals across the world.

 

What’s of interest here? Well, it’s worth noting that the Asia/Pacific region, which includes Australia, now has the largest average deal value, at $65 million.

 

While North America still accounts for the vast bulk of start-up investment deals, the number of deals in Asia/Pacific companies has surged by 79% over the past year.

 

In terms of the sectors that are getting the money, apps, gaming and marketing appear to be falling out of fashion with investors. The smart money, at least over the past year, has been on technology hardware.

 

Benjamin Chong, partner at Right Click Capital, says: “It’s heartening to see more deals involving Australian-based businesses.”

 

“I believe the decrease in the average deal value growth of investments in the Asia/Pacific region is more attributable to the growing health of the angel space in Australia with more deals occurring $500,0000 to $5 million this year.”

 

“The $84 million Catch Of The Day deal that happened last year in Q2 significantly impacted the investment values for the 2011 quarter. A promising sign for Aussie start-ups looking to exit is the 181% increase in the average deal value growth of acquisitions in Asia/Pacific region.”

 

“Although there is less activity per capita in Australia compared with North America, good companies are getting backed. This means Australian start-ups need to make an effort to refine their idea into a viable business that can get funding.”

 

“Not all start-ups need large amounts of capital. Start-ups with a well thought through idea and market traction get the attention of investors.”

 

“There has been continued consolidation in the hardware and infrastructure sector, driving the high number of  such deals. Although some of the heat has come out of the games sector, there is still a large amount of activity.

 

“Developers should look at markets where there’s an intersection between their passion and and an existing high demand for a product/service.”

 

 

Click on the below graphics to see exactly where, when and how much is being spent by investors on new tech ventures.

 

 

 

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