Software industry attracts highest level of venture capital funding in Q3

22 Oct 2012

Out of the US$12.5bn invested in 1,046 funding deals during the third quarter, the software industry attracted the highest amount (26pc), with US$3.3bn invested during the quarter.

According to market intelligence firm Digimind, based on data provided by, the industrial and energy sectors received the second-highest investment amount in Q3, with US$1.9bn going into 122 deals, with an average deal amount of US$16m.

Meanwhile, companies in the healthcare sector attracted US$398m which went into 54 deals, accounting for 3pc of all VC dollars invested for the quarter.

Companies in the consumer products and services sector raised US$1.2bn which went into 71 deals, a clear sign of investor confidence in the sector despite a gloomy global economy.

Monthly investment breakdown

Funds raised in July amounted to US$3.8bn, which went into 282 deals. August saw a slightly greater number of investment deals (298) but with a smaller combined total of US$3.3bn. Following the summer months of July and August, investors ramped up their funding activity in September to close 466 deals amounting to US$5.5bn for the entire month.

The majority of funding deals in Q3 (almost 70pc) were investments of less than US$10m. A quarter of all investment deals ranged from US$10m-US$50m. While just 4pc of VC deals ranged from US$50m-US$100m.

Most funding activity in the third quarter emanated from the US, with 70pc of all VC funds being funnelled into US companies. Some 740 US companies received a combined total of US$8.8bn. Deals involving UK companies amounted to US$767m, making it the second most active global investment hotspot.

Canada comes in at third place in terms of number and value of funding transactions during Q3. Canadian companies raised US$498m for the quarter, which went into 53 deals.

In China, companies there raised a combined total of US$338m. 

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years