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Will Internet Overtake Health Care in VC Arena?

In recent years, VC funding has weighed more heavily toward health care in terms of dollars. But CB Insights reports that gap is narrowing, and in fact, more actual deals were made in the internet sector in the 2nd quarter of 2010.

The healthcare sector has been the winner in terms of venture capital funding for many quarters.  Q2 2010’s quarterly venture capital report was no different but the margin of victory was smaller as healthcare edged out internet funding by a mere 1%.  On a deals basis, the internet sector far outweighed the healthcare sector pulling in 38% of deals vs. 23% of deals for healthcare.

More notable is the overall downtrend … in venture capital going to healthcare over the last five quarters.  Healthcare venture dollars may swing a fair amount (not to the wild venture capital fluctuations of green/clean tech) based on the back of a few large deals which the sector sees or doesn’t see from quarter to quarter so is this downtrend merely the absence of a few large deals or indicative of a more pervasive general trend down for the healthcare sector.

Is this, as CB Insights suggests, part of a down trend for health care in the VC arena?

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