companies raised $1.8 billion in venture capital funding which is down 14% in total funding versus Q2 of 2010 and down 6% in the number of companies funded.

Three of the four sectors showed a decrease in funding amounts and the number of companies funded. Only the Software sector showed an increase in funding amounts, jumping 19% in terms of actual investment amount.

Internet

Internet sector company fundings reversed their previous quarterly increase by registering a dollar percentage decrease of 18%. The sector received $774 million in venture capital funding during the quarter allocated among 167 companies – a decrease of 2% in the number of companies funded.

Textbook rental giant Chegg secured the largest round of the quarter, receiving $75 million in new funding. Service provider Angie’s List garnered $22.5 million during the quarter. In the early development stage, more than 30 companies received series A financing rounds for a total of $200 million resulting in an average of $6.7 million per disclosed round.

Digital Media

The Digital Media sector, which VentureDeal identifies as either video/casual game developers or ad networks, posted a decreased in both total amounts funded and the number of companies funded. Total funding decreased quarter over quarter by 69% to $128 million, with 32 companies being funded, a decrease of 22% versus the previous quarter.

Notable raises for the quarter include Brand Affinity Technologies ($20 million) and Aurora Feint ($5 million).

eCommerce

Investments in the eCommerce sector also decreased for the quarter with 8 companies receiving a total of $39 million in funding, a decrease of 50% in financing amounts versus the previous quarter’s tally. Notable raises in the market include WePay ($7.5 million).

Software

Software company saw the largest investments for the quarter, raising $847 million between 136 companies. This was an increase of 19% in total funding amount and a
decrease of 6% in the number of companies funded.

The average round size registered increased from $4.8 million in Q2 2010 to $6.2 million in the current quarter, a growth of 29%.

On demand contact automation manager Contact Solutions raised the largest round in the quarter ($46 million); followed by application testing startup uTest with $13 million in new funding.

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Authors: Leena Rao

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