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Declining Venture Capital Investment in Semiconductors & Electronics - June 2013

In terms of the global number and aggregate value of venture capital financings in Q2 2013, the internet sector dominated once again, with a quarter of all financings directed towards companies in this industry and 23% of venture capital dollars channelled in this direction. The healthcare and software industries complete the top three, with companies in these three industries seeing a combined 66% of both the number and aggregate value of venture capital financings globally. In the year to date, the three aforementioned industries have accounted for 65% of financings and 67% of the aggregate value of deals, up from 62% of the number and 60% of total value for 2012 as a whole. These figures represent the continuation of a steady rise in the proportion of the number and aggregate value of venture capital financings attributed to these three industries, from 58% and 54% respectively in 2008.

With the increasing number and aggregate value of venture capital deals focusing on this trifecta of industries, it is inevitable that certain others will suffer in terms of venture capital investment. One such industry is the semiconductors and electronics sector, which in Q2 2013 – and for the year as a whole – received just 2% of the number and aggregate value of financings globally. In 2008, this industry was the seventh highest in terms of venture capital investment, comprising 5% of the number and aggregate value of deals. In 2009, these proportions remained at 5% before both falling to 4% in 2010. The following year saw 3% of the number and 4% of the value of deals directed towards semiconductor and electronics firms, falling further to 2% of the number and 3% of the value in 2012.

Despite 2012 registering the lowest number and aggregate value of deals across the period for the semiconductors and electronics industry, there were some examples of large rounds of investment in the sector, such as Netherlands-based Mapper Lithography’s €80mn financing in August from a group of new and returning investors.

Keywords: venture capital, Semiconductors & Electronics