Jones Lang LaSalle


Venture capitalists boost NY-area investment
by Amanda Fung January 24, 2006

Venture capital firms invested $1.7 billion in 164 companies in the New York area last year, up 13% from the prior year.

Venture capital firms invested $1.7 billion in 164 companies in the New York area last year, up 13% from the prior year, according to a quarterly industry survey released Tuesday. New York maintained its third-place standing in the nation since 2002, behind Silicon Valley with $7.6 billion in 895 deals and New England with $2.6 billion in 385 deals, according to the MoneyTree Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.

"The New York Metro region has demonstrated moderate but hopefully sustainable growth over the past three years," David Silverman, New York managing partner for venture capital and entrepreneurial companies at PricewaterhouseCoopers, said in a statement. Nationwide, venture capitalists invested $21.7 billion in 2,939 deals in 2005, slightly more than the $21.6 billion in 2004. The $200 million increase for New York-area tech companies was led by two deals totaling $313 million in the financial services sector and two deals totaling $208 million in the telecom sector. Fourth-quarter investments of $287 million were almost matched from $283 million in the third quarter of 2005.

Expansion-stage companies in the area received $642 million in 79 deals. Later-stage firms got $608 million in 51 deals and early-stage firms gained $112 million in 31 deals. For the year, financial services received $378 million, outpacing the usual front runners in dollar terms. Life Sciences firms got $244 million, software $293 million and IT Services got $195 million. "The activity and diversity speaks to the opportunity all sectors have in obtaining funding in the New York metro region," said Mr. Silverman.