Internet-Specific Wrap: Financial Service Sites Can’t Cash In

The online financial services sector isn?t what it used to be. Since the beginning of the year, only 38 online financial companies have received funding — less than half of the number of firms that received venture capital over the same time period last year, according to out VentureXpert database

The 90 companies that were funded last year received a whopping total of $1.947 billion. So far this year, only $425.57 million has been pushed into the sector. And while 181 investment houses bet on the sector last year, just 69 VCs have participated in 2001.

Last year?s biggest money winner in the sector between January and May was AdvisorTech Corp., an application service provider that provides personal financial advisers with the tools and software they need to do transactions, which received $145 million. During the same time period this year, the highest tally was a $60 million infusion into PayPal.

In terms of geography, most sector money flowed into California and New York, and only ten overseas online financial services firms received funding.

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