Report: Venture capital for 'Net startups flat in '08

26.01.2009
Internet-based and software companies held their own in 2008 among businesses receiving venture capital money, bucking the overall trend of fewer available venture dollars.

Companies that depend on the Internet held their own for the year, garnering US$4.9 billion vs. $5 billion the previous year, accounting for 17% of overall investment, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.

Software companies represented the largest single category of investment sectors in both the number of dollars invested and the number of deals (881). But they still took a venture hit in 2008, with investments of $4.9 billion representing a from 2007.

Only two companies made the top 10 list for most money received in 2008. One was Pocket Communications Northeast, a flat-rate cell-phone network provider with service in parts of Massachusetts, Connecticut and Texas that took in $100 million.

Reardon Commerce also took in $100 million for its software-as-a-service business that provides an online personal assistant that can handle business conferencing, shipping, travel, dining and events for its customers by tapping into its network of partner vendors.

In the fourth quarter, i/o Data Centers, a data center collocation provider, landed $56 million to expand its business, ranking it among the top 10 recipients for the quarter.