The Quarterly Venture Capital Resource report was released by Ernst & Young LLP and VentureOne on Monday, with the health care and information technology industry receiving the most funding from Venture Capitalists (VC).
Reaching a four-and-a-half-year peak, U.S. venture capital invested $6.73 billion spread over 619 deals during the 2006 second quarter, which represented a 5 percent increase in deal count, since last year. This was the highest investment by VCs since 2001.
The health care industry received $2.24 billion in 160 rounds and was primarily driven by the biopharmaceutical sector, with a number of large deals with major pharmaceutical companies.
â€œA plethora of very promising and innovative life science companies and a public market climate that is supporting, at least moderately, health care IPOs over the past 2 1/2 years,â€ said Stephen Harmston, director of global research at VentureOne.
The median size of a health care deal was $8 million, down slightly from $8.2 million a year ago.
The information technology industry also posted high investment from VCs, where the overall deal count was steady at 363 and investment was up 2 percent over a year ago to $3.51 billion. This sector was driven by the information service division which posted a 76 percent increase to 79 deals and capital rose 128 percent to $637 million.
Overall, the median size of an IT deal was $7.8 million, the highest IT median deal size since 2001.
The biggest deal for the second quarter of 2006, was the $130 million later round investment in Current Communications of Rochester, N.Y., which provides broadband over power-lines.