Internet Companies Big '09 Venture-Capital Winners

By Carol Tice Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Venture 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.

Carol Tice

Owner of Make a Living Writing

Longtime Seattle business writer Carol Tice has written for Entrepreneur, Forbes, Delta Sky and many more. She writes the award-winning Make a Living Writing blog. Her new ebook for Oberlo is Crowdfunding for Entrepreneurs.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Growing a Business

7 AI Tools That Help You Build a One-Person Business — and Make Money While You Sleep

Who needs a team? These seven AI tools let you automate everything, scale like a beast and reclaim your time.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

'Applications Are Surging': Small Business Administration Reports Significant Growth in Loan Approvals

The Small Business Administration launched its Made in America Manufacturing Initiative last month.

Money & Finance

Make Money on Autopilot With These 5 Smart Passive Income Ideas

Five innovative ways to earn money even when you're sleeping.