2013 VC Funding Tops $29B, and Software Continues to Eat the World

1/17/14Follow @bvbigelow

A few years ago, the technology investor Marc Andreessen wrote an essay that explained “Why Software is Eating the World”—and in 2013 venture capital investors laid out a feast to match the industry’s voracious appetite.

Venture investments in both software and Internet-specific deals last year amounted to $18.1 billion, or nearly 62 percent of the $29.4 billion total that VCs invested in all industries nationwide, according to the end-of-year MoneyTree Report being released today. The report is prepared by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.

Software investments alone accounted for more than a third of the year’s total, as venture firms pumped $10.9 billion into the sector—a 27 percent jump from the nearly $8.6 billion that went into software in 2012. The deal count increased by about 10 percent (from 1,384 deals in 2012 to 1,523 last year), and software obviously continues to reign as the single biggest sector for venture activity.

At the same time, VC funding for Internet-specific companies hit a 12-year high in 2013, with investors sinking more than $7.1 billion into 1,059 transactions nationwide, according to MoneyTree data. That represents a 7 percent increase in dollars (and a 6 percent increase in deals) compared with 2012, when VCs invested nearly $6.7 billion in 995 Internet deals.

Altogether, the $29.4 billion that VCs invested in 3,995 deals throughout the U.S. last year represented a 7 percent increase in dollars, and a 4 percent rise in deals, compared with 2012, when VCs put $27.3 billion in 3,858 deals. (A list of the top 10 deals of 2013 is below)

“It is no surprise that more venture capital dollars are flowing into … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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