VC investment fell nearly across the board in 2012, but the electronics industry remains especially neglected.
bf sv nation vc spending falls
SAN FRANCISCO--If you're an engineer with a great start-up idea,
forget about seeking venture funding: They don't care about you any
In fact, venture capitalists in 2012 didn't have a lot of love for
most entrepreneurs: Total money invested fell 11 percent from 2011,
while the number of deals fell 6 percent. It was the first time in
three years that investment dollars have fallen, according to the
PricewaterhouseCoopers MoneyTree report, released
By contrast, when the numbers came in last year, money invested in 2011
was up 26 percent over 2010, and deals were up 9 percent. What
brought down the overall numbers in 2012? An escape from biotech
(-18 percent to $4.1 billion) and clean tech investments (-28
percent to $3.3 billion). The bright spot was the biggest sector in
the report, software, whose $8.2 billion invested dollars were up 9
percent year over year.
Now for the ugly, but not surprising news: Electronics and
semiconductors remain VC's ugly ducking. Money spent on electronics
and instrumentation fell a whopping 84 percent in 2012 and 46
percent in semiconductors. In 2011, those sectors enjoyed 5 and 29
percent increases increases in investment. Deals in 2012 fell 20 and
29 percent respectively in those sectors, according to the MoneyTree
Source: MoneyTree VC report
But we've known this for a long time. The high point, of course, was
2000, when $3.3 billion was spent on semiconductor startups and $797
million in electronics equipment and instrumentation. In 2012, those
numbers were $920 million and $237 million.
So we're down
considerably from those peaks, but up significantly from 1995, which
you could consider a reasonable year in a historically reasonable
era: Just $214 million was invested in semiconductors, $151 million
in electronics and instrumentation.