IT Companies Snag Funding, Web Startups Not so Much

Susan Hall
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Stories such as Andreessen Horowitz making $78 million off an early $250,000 investment in Instagram capture the public imagination.

 

However, venture capital grew for young IT companies in the first quarter, especially those working on enterprise software, while it declined for flashy Web startups, Computerworld reports. In a quarterly survey by Dow Jones VentureSource, $2 billion was invested in 257 deals with young IT companies, a 14 percent increase in dollars and a 2 percent increase in the number of deals over the same period a year ago. Enterprise software companies made 196 deals for a total of $1.3 billion, a rise of 6 percent in deals and 61 percent more money than a year earlier. The bulk of that investment was aimed at application development, which I read to mean jobs for developers and project managers.

 

Meanwhile, Internet companies attracted $375 million in 88 deals, a decline of 76 percent in money and 17 percent fewer deals. The report found that investment overall fell 18 percent from last year, totaling $6.3 billion for all business sectors.

 

Meanwhile, an infographic released last week on U.S. startup hubs by Venture 51, an early-stage venture fund based in Scottsdale, Ariz., shows the Midwest far outpacing the rest of the country in growth, as Silicon Prairie News touts, but it's based on 2005-2010 data and the graphic notes that almost all regions except New York City have seen a drop in new deals.


 

Those Silicon Valley startups continue to raise money, though, which means hiring. A Wall Street Journal article points to these in particular:

 

  • Yummly in Palo Alto, Calif., which is creating a searchable database of recipes, recently raised $6 million. It plans to hire 30 people in the next year, tripling its headcount, and is seeking people skilled in data science, natural language processing and machine learning.

 

  • Adaptive Planning, in Mountain View, Calif., recently raised $22 million to scale up its business in budget-planning software. It will hire 65 this year. It's looking for engineers with experience in Java and quality assurance, as well as salespeople.

 

  • Appirio, San Mateo, Calif., raised $60 million in March to help companies plan their cloud computing strategies. It will hire 200 people including engineers with cloud experience, quality assurance engineers and architects.

 

  • Jumio, Mountain View, Calif., raised $25 million to further its mobile payment strategy. Among the 30 hires it expects to make this year will be Java developers, computer graphics specialists and engineers with experience in object recognition codes.


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