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Life sciences lead US venture investments

Biotech and medical device deals represented 32 percent of investments during the first quarter, which saw an approximate 5 percent drop in investment dollars from the same period in 2007.

Life sciences led the US venture capital market in the first quarter, with $2.3 billion (€1.4 billion) going into 220 deals. The total is roughly 15 percent more than the amount invested in the first quarter of 2007, according to a MoneyTree report released with PricewaterhouseCoopers and the National Venture Capital Association

The life sciences sector, which includes both biotech and medical devices, accounted for 32 percent of all VC investment dollars in the first quarter, as well as 24 percent of all deals.

Biotech alone was number one in terms of dollars invested; it racked up $1.27 billion-worth of investment, beating out the software sector which received $1.26 billion. Software led all sectors in terms of deal volume with a total of 234 deals done in the first quarter.

The much-hyped cleantech sector’s investment grew 51 percent in the first quarter compared to the same period last year, capturing $625 million in investments. It also accounted for four of the 10 largest deals done in the first quarter.

“The continued interest in the life sciences and clean technology industries, as well as the traditional IT sectors, reflects the long term investment horizon that the venture industry has always embraced,” Mark Heesen, NVCA president, said in a statement. “We do not expect to see significant declines in investment levels in the coming year. However, the dollars going to later stage investments could increase if the IPO window remains closed for an extended period of time and venture capitalists have to sustain companies longer than expected.”

Total venture investments for the quarter totaled $7.1 billion, a drop of approximately 5 percent compared to the same period a year ago. Deal volume, however, increased to 922 transactions, up from 861 in the first quarter of 2007.