Network start-ups still hot, hot, hot

Network start-ups still hot, hot, hot

Venture capital investments in network start-ups have reached an all-time high, with second quarter funding nearly triple what it was a year ago, according to a study.

The findings come from the quarterly PricewaterhouseCoopers/Network World Venture Capital Survey.

More than 300 start-ups offering communications services, software and hardware received just over $US3 billion in funding, with the average investment topping $10 million. The network sector garnered about 40 per cent of the total venture capital investment in the US during the second quarter. Altogether, venture capitalists pumped $7.67 billion into about 1000 US companies, up from $4.31 billion in the first quarter.

For enterprise customers, the venture capital study demonstrates how dynamic the network industry is. Record-setting investments in network technology mean that many new and innovative products will be getting to market in the next 12 to 18 months.

Most of the network investments were tied to the Internet either directly, such as in ISPs or electronic commerce software, or indirectly as in higher bandwidth technologies needed to accommodate Internet traffic.

Network investments increased by far the most of any category in the study.

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