Study: VC Funding on the Rise

Venture capital (VC) investments in U.S. companies rose to the highest total since the dot-com bust, according to a new report from auditor Ernst & Young and VentureOne, CNET News.com reports.

Venture capital investments reached $22.13 billion last year, up 2 percent from 2004.

IT led the deals inked in 2005-roughly 2,200-but the overall industry investments of just under $12 billion were down 4 percent from the $12.45 billion in 2004, the study says.  Within the industry, communications garnered nearly $3 billion in investments for 5 percent more funding than in 2004. Information Services pulled in $1.11 billion, the most that sector has seen in more than four years.

In 2000, during the dot-com boom, the IT industry reached its peak with $59.56 billion in funding.

“Investors clearly showed diversity in their portfolios in 2005.  While information technology continued to receive the lion’s share of investment, companies focused on health care, business, consumer and financial services, and alternative energy…also gain in favor,” said Stephen Harmston, director of global research for VentureOne, a unit of Dow Jones.

-Al Sacco