Last April, the venture capital community was just beginning to become wary of Internet-specific investments. One year later, that unease has turned into a full-fledged investment flight from the sector.
According to preliminary figures from our VentureXpert database, a whopping $4.05 billion was sunk into 321 Internet-specific companies last April. This April, however, only 75 such firms received venture dollars, to the tune of just $886.68 million.
The drop-off seems to have come, not surprisingly, from the lack of dotcom names on the end of this April?s VC reception line. In 2000, the list was flooded with 60 dotcom plays, with names such as ditto.com and SkyAuction.com. This April, only 9 dotcoms got funded, including BuildOnline.com, OnExchange.com, Hotbar.com and 401kExchange.com.
Overall, a significant portion of the capital disbursed into the Internet-specific sector seemed to flow toward e-education plays. Blackboard Inc. led the pack with a $48 million deal, and was joined by companies like Knowledge Impact Inc. and TheBrain Technologies Corp..
The largest deal in the sector, however, belonged to a wireless Internet access provider named Clearwire Holdings. The Arlington, Texas-based firm raised $97 million in a deal led by Goldman, Sachs & Co. Ranking second was Vancouver, Wash.-based bandwidth provider New Edge Networks, which scored $77.5 million.
Contact Danielle Fugazy.