49 Web 2.0 Companies Garner $262.3 million in Venture Capital in 1H 2006

According to a new research study from Dow Jones VentureOne, 49 Web 2.0 companies have been funded in the first half of 2006, garnering $262.3 million in equity capital. That compares to 51 deals and $199.1 million invested into similar companies in all of 2005, indicating activity is likely to double last year’s level. 

By comparison, a total of $13 billion was invested in 1,213 U.S. venture-backed companies in the first half of this year. The median size of a Web 2.0 financing round this year is $4.4 million, compared to $7.5 million for a venture financing overall.

Some 65% of the Web 2.0 deals so far this year have been seed- and first-round deals. Last year 75% of the deals were for these early-stage financings. Seven later-stage deals were completed in the first two quarters of 2006. 

More than half the companies (25) receiving investments in 2006 were generating revenue, including three which were identified as profitable. Those revenue generating companies also received 61% of the total investment.

None of the venture-backed Web 2.0 companies have achieved an IPO to date, and fewer than 10 have been acquired, including such companies as del.icio.us and MySpace.com. The majority of the Web 2.0 rounds funded this year (27) were listed as IT consumer services companies, receiving $165.3 million. 

The median pre-money valuation for a Web 2.0 company this year is $5 million, but the median pre-money valuation for a U.S. venture-backed company as a whole is $20 million, so far this year. Among the largest Web 2.0 deals this year are Facebook which received a $25 million second round and Zimbra which received a $14.5 million later round.

The most active investors in Web 2.0 this year include Accel Partners, General Catalyst Partners, and Draper Fisher Jurvetson. When compared over a longer period -- since 2001--the most active investors include those three along with Sequoia Capital and Omidyar Network.

Companies included in this study have a business model that revolves around a dynamic interface facilitating participation through such methods as user-created content, networking, and collaboration. Applications used include podcasting, tagging, blogs, social networking, mashups, and wikis. Technologies used in these applications include: AJAX, RSS, SOA, CSS, XHTML, Atom, and rich Internet applications. This study only included companies headquartered in the U.S.

For additional details on Web 2.0 VC Deals : (Read/WriteWeb) and VC investments in Web 2.0 companies booming, better study shows (VentureBeat)

Also check these for a broad list of Web 2.0 companies: Seth Godin's Web 2.0 Traffic Watch List (Alexaholic), EVERYTHING 2.0 and All Things Web 2.0.

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