Corporate venturing in the US has continued to increase to its highest level since the dot.com bubble burst after the millennium.
US trade body the National Venture Capital Association (NVCA) said corporate venturing made up 13% of all venture capital rounds so far this year and 9% of the money invested, compared to a peak of 20% in 2000.
Mark Heesen, president of the NVCA, at the trade body’s conference for corporate venturing said there had also been a shift in economic sectors target by corporate venturing. He said 27% of the dollars invested by corporate venturing units went to the industrial and clean-tech sector compared to 14% to 15% for all venture capital (VC) deals.
He added that clean-tech "will be the largest area of venture investing overall as it sits at the convergence of areas, such as biotech and IT".
He said while the number of independent VC firms was not falling as rapidly as many had feared but there was a high reduction in the number of people working at them as fund sizes continued to shrink on average.
However, Heesen said: "I am more optimistic today than I have been as the numbers are on our side, the economy is coming back and impact of the [mid-term US] elections will be more about looking at spending over tax [increases]."
He was also optimistic that the increased number of companies in Securities and Exchange Commission registration for a flotation were coming from businesses that actually wanted to go public rather than signaling for a potential acquirer. He said there were also a record number of trade sales delivering strong returns and there would be a further increase in activity over the next five months.
Consultancy firm Cambridge Associates and the NVCA said the 10-year return on venture investing was -4.2% at the end of the June, compared with 14.3% during the same period last year.
VCs invested $7.8bn in 995 deals for companies based in the US, Europe, Canada, Israel, Mainland China and India, down from $7.9bn put into 1,025 deals during the same period last year, according to data provider Dow Jones VentureSource.