Open Source Venture Funding Up in 2006

Lora Bentley

The end of a year always brings product review roundups, best and worst lists, top trends lists and, of course, predictions for what the new year will bring. The open source segment is no different.


Grabbing headlines in open source these days is the fact that venture capital investments in open source have grown. Exactly how much depends on whom you ask, of course, and how you frame the question.


For example, a Computer Business Review blog reveals that investments into open source firms that CBR tracks have jumped more than 100 percent this year, to $404.5 million. The writer doesn't reveal which companies the publication is keeping an eye on -- except to mention that rPath, MontaVista and Linux Networx had good funding rounds -- or what last year's numbers were. However, since the blog post hints at a full article on the subject soon, we'll keep an eye out for more details.


Comparing numbers from 2002 to those for 2005, The Street also reports an increase in venture funding for open source, from $72 million to $262 million. The fact that conventional software companies garnered nearly 20 times that tally is neither here nor there, according to investors, whom the story cites as saying that the open source wave is stronger than it looks.


And finally, looking at the investments of two particular firms, an InfoWorld Netherlands story highlights how open source VCs are "fundamentally chang[ing] the economics of IT" as open source climbs the software stack.

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