VC investment hits 13-year high

Apr 18, 2014

Venture capitalists invested $9.5 billion last quarter, the highest total since the dotcom doom's waning days.

FORTUNE -- No, it isn't your imagination: Venture capitalists are investing money at a faster clip than in any time since the final days of the dotcom boom.

VCs pumped $9.5 billion into 951 U.S.-based companies last quarter, which was the most money invested in any quarter since Q2 2001, according to MoneyTree survey data published today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (tri). The dollar figure represents a whopping 57% increase over Q1 2013, while the deal number is nearly 4% higher (12% increase in dollars and 14% decrease in deals from Q4 2013). Or, put another way, average deal sizes are skyrocketing.

The quarter included nine rounds of $100 million or more, led by Dropbox's $325 million raise from back in January (a deal that may actually be a bit larger).

Not surprisingly, the leading industry sector was software with more than $4 billion invested. It was followed by biotech with $1.06 billion and media/entertainment with $743 million.

From a geographic perspective, California-based companies led the nation with a whopping $5.46 billion raised for406 startups ($4.6 billion of which was in Silicon Valley). Massachusetts placed second with $960 million raised by 88 companies, while New York had $754 million raised by 97 companies.

It’s also worth noting that MoneyTree’s reported VC investment pace over the past couple of years has easily outstripped VC fundraising (as reported by the NVCA and Thomson Reuters). But it really isn’t an apples-to-apples comparison, because the investment reports include monies disbursed by non-traditional sources like T. Rowe Price and Fidelity (i.e., big later-stage players), while the fundraising stats don’t account for those capital pools (only traditional GP/LP venture structures).

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