Computer Software Wrap: VC Disbursements Cut In Half –

With dedicated computer software investors spending most of their time propping up existing portfolio companies, venture investment this year in the computer software and hardware sectors has fallen to just half of last year?s level. While 400 companies in the computer software sector have raised approximately $3.66 billion from private equity investors since January, at the same point last year, venture capitalists had already ponied up more than $7.07 billion for 585 young companies.

In the hardware arena, private equity investment this year has totaled $479 million. Last year, however, 88 companies had already closed on $1.42 billion of venture financing.

While venture capitalists have funded 61 companies in the sector year to date, the largest deal in the sector counts for a $40 million slice of the pie. In March, Applied Science Fiction Inc. of Austin completed a Series D round led by RHO Management. InterWest Partners, IBM Corp., Triton Ventures and Technology Crossover Ventures also joined in the digital image-related technology developerÌs financing.

Even with more money in the pot, computer-related venture investment likely will remain slow for the remainder of the year. Until an exit widow appears and stability returns to the public markets, investors will save the pieces of the portfolio that can be saved and stay out of new companies until technology-based start-ups can be fairly valued against the market.