The numbers are out for how much money venture capitalists poured into Web 2.0 startups like Facebook, Zillow, and Netvibes during the first half of this year. Worldwide, counts Dow Jones VentureOne, VCs put $464 million into 101 deals. That’s up from 89 deals worth $432 million during the first half of 2006. (See the full-year 2006 figures here). Most of this increase comes from Europe, where early-stage investors are getting the Web 2.0 bug.
Two thirds of those 101 deals were in the U.S., maintaining a steady pace with the activity during the same period last year. But the $357 million raised in U.S. venture deals represents a mere 1.6 percent up-tick from last year. And while Web 2.0 deals made up 30 percent of all “information services” deals, that’s actually down from 41 percent last year.
With all the low-hanging fruit already well picked over in the U.S., VCs here are migrating to later-stage financings and funding startups focused on the enterprise, whereas consumer-oriented deals still dominate overseas.
Sequoia Capital and Draper Fischer Jurvetson lead the charge in Web 2.0 financings, with six and five deals, respectively, But, for the first time, New England beat out the Bay Area in terms of money raised for Web 2.0 companies ($102 million vs. $90 million).
Soon, it is going to stop making sense to count Web 2.0 deals separately from any other Internet deals. At this point, any Internet company worth its salt can claim some Web 2.0 karma.
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