The impact of the IT landscape has been on the rise in recent years. Since the recession ended and the economy has started to grow again, many organizations with ties to the technology landscape have found themselves in high demand. As 2014 has started, the sector seems to be hitting historic highs.
Recently, MoneyTree released a report in collaboration with PricewaterhouseCoopers LLP and the National Venture Capital Association. The goal of the study was to look at venture capital investing based on data provided so far in the first quarter of 2014.
According to the numbers, the first three months of the year saw venture capital investments activity increase 12 percent in terms of dollars, but drop 14 percent in terms of the number of deals. This is when compared to the fourth quarter of 2013, when $8.4 billion was invested in 1,112 deals. In the first quarter of 2014, $9.5 billion was invested in 951 deals. This is the highest quarterly total since Q2 of 2001.
Technology market shines
In the report, technology investments shine bright. The software industry received the highest investment levels funding in all industries. In the first quarter, investments increased 39 percent from the previous quarter to $4 billion. This happened with 414 deals.
Mark McCaffrey, the global software leader and technology partner at PwC, told the news source that investments into the Software sector continue to thrive as investors look for companies with disruptive technology that challenges the norm.
"These companies are attracting significant funding from venture capitalists and non-traditional investors alike as their business models continue to provide real value across all sectors and get access to global markets," McCaffrey said. "Clearly, the heightened interest is driving healthy valuations which could meet with some volatility. However, barring any significant macroeconomic event, we expect a strong level of investing to continue as these models meet customer needs and deliver value to the stakeholders."
Biotechnology came in second compared to all industries, with $1.1 billion going to 112 deals. The IT services industry was third on the list with a Q1 total of $816 million coming from 59 deals.
Some locations are better than others
One surprising part of the study is how some areas of the country are making great strides. For example, Connecticut has fared very well.
According to an article from The New Haven Courant — which examined the MoneyTree report — the first three months of 2014 saw the state's largest quarterly tally of venture capital in years reaching $189 million. This is more than three times larger than any quarter previous over the last two years.
"The large quarter for tech investments does not necessarily mark a trend, as venture capital deals don't follow a clear pattern from quarter to quarter," the article reads. "But the New York metro region, which includes Fairfield and New Haven counties, has had two straight quarters with deal levels not seen since 2001."
The technology marketplace is growing stronger, and these investment numbers show why that is the case. Companies in the Tri-state area that are looking to take advantage of this should partner with an New York or Fairfield IT support service.