Internet Companies Big '09 Venture-Capital Winners

Owner of Make a Living Writing
min read
Opinions expressed by Entrepreneur contributors are their own.
venturedeal.jpgVenture Capital investment has tanked since the downturn hit. But some sectors are starting to see growth in VC funding again, recent data from VentureDeal shows.

Biotech stayed the biggest funding subsector in the world of technology with $1.9 billion in funding in the fourth quarter of 2009, flat with the previous quarter. Internet-sector companies leapt ahead 38 percent, the biggest gain of any sector, snagging $1.8 billion in funding.

Telecom companies lagged, sinking 17 percent to get just $231 million in funding,with wireless companies getting the bulk of the money. Weirdly, despite all the support for alternative energy in the stimulus bill, that sector sank too, seeing 45 percent fewer dollars at $232 million.
More than a dozen Internet startups got that coveted first round of funding in the quarter. One of the biggest rounds went to pre-launch search startup Kakai, which landed $7.5 million.

PageOnce got the next-biggest round at $6.5 million. The free service helps business people track their travel, celphone minutes and other financial tools in one place. The round was part of $10 million they've raised in all.

Boy, pre-launch companies getting venture capital...companies with free products getting venture capital...I feel like I'm having a dot-com bubble-era flashback. Hopefully there's a revenue model in there somewhere.

The outlook for VC funding this year isn't too optimistic, in part due to consolidation among the big VC firms, as fewer funds attract capital. On the other hand, venture capitalists who're staying in the game are upbeat about 2010, due to the recovering merger-and-acquisition and IPO markets, which give investors hope about profitable exits they might see a few years down the road.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Amplify your business knowledge and reach your full entrepreneurial potential with Entrepreneur Insider’s exclusive benefits. For just $5 per month, get access to premium content, webinars, an ad-free experience, and more! Plus, enjoy a FREE 1-year Entrepreneur magazine subscription.
Are you paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.

Latest on Entrepreneur