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13th October 2003
 The technology venture capital (VC) market is showing signs of a recovery, withcapital investments rising in the US and optimism improving in the UK. The latest quarterly MoneyTree survey says US venture capitalists invested $ 4.3bn in 669 firms in the second quarter of 2003, slightly up from $ 4bn into 647 firms inthe first quarter. 'The signs are encouraging, if not yet definitive. Quarterly investing in the $ 4bn range is sustainable and well in line with historic norms,' said Tracy Lefteroff, global managing partner of the VC practice at PriceWaterhouseCoopers. Software is the most attractive sector for investors, with 179 companies bringing in $ 864m, up 7 per cent from the previous quarter. Semiconductor investment was flat, while networking declined. UK VCs are expecting to benefit from the positive changes in the US. 'The markets have been doing well in the past few weeks, so the sentiment has been better. The real trigger is going to be a couple of IPOs,' said Bundeep Singh Rangar, chief operating officer of Ariadne Capital. 'What we've seen is a general rise in sentiment and a lot of merger and acquisition activity, especially in the US, which has given a lot of optimism,' he said. 'The acid test will be how the IPOs shape out in the second half of year, but a lot of people are starting to excited about the upturn. There's a lot more business plans, more interest in the VC market and generally a lot more activity.' But the British Venture Capital Association says the market remains tough. 'The business environment is still challenging in the UK, but as always there are opportunities for those who are diligent and energetic,' said a spokesman. The quarterly MoneyTree survey is carried out by PriceWaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. |
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