By Sonya Rabbitte, 17 May 2000 12:44
NEWS UK venture capital funds are set to invest record amounts in technology, with a 17 per cent increase in funding since this time last year. One-fifth of the £5.8bn raised by venture capitalists in 1999 will go to IT companies compared with just three per cent in 1998, according to figures released by the British Venture Capital Association (BVCA). The £1.09bn investment by UK venture capitalists in technology companies represents a 55 per cent increase on last year, according to the BVCA. Speaking to silicon.com, David Thorp, vice chairman of the BVCA, said the 20 per cent figure was probably an underestimate, as it only took into account money from technology funds. He said the sharp increase represented a natural progression as older and more traditional companies, and consequently venture capitalists began to invest in IT. However, he stressed that while the trend was set to continue, funds were more likely to go to technology companies focusing on business-to-business concepts such as Web-enabling companies and those developing e-security devices, rather than dot-coms. Phil Cooper, business development manager and founder of DCfor.com - a start-up service for new dot-coms - said he was pleased to see an increased IT investment but stressed it was still not enough. "IT has become an accepted thing for people to do rather than have a safe job in a blue-chip company. The risk profile of investment funds needs to be a little more aggressive," Cooper added.
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