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After a year of diminished venture investments, the VC community appears positive that a rebound in deal volumes would occur this year
The venture capital (VC) industry is optimistic about renewed investments this year, with focus shifting primarily to the green technology sector, a survey by global consultancy KPMG has said.
According to a poll of around 200 investors, venture capitalists and bankers, after a year of diminished venture investments, the VC community appears positive that a rebound in deal volumes would occur this year.
The survey found that 67% of respondents expect venture capital investment to increase in 2010, a drastic shift from only 23% predicting a rise in last year's survey. Only 7% see a decline in investment levels for 2010 compared to more than half (56%) predicting a year-to-year drop last year.
The survey indicated that the green-tech sector would be more attractive to investors this year.
About 77% of those surveyed say venture investment in green technology would increase this year as compared to 2009, including 15% who project investment to jump by more than 20%.
"There is no doubt that the green-tech sector remains an attractive investment area, but the difficult economic environment had investors operating in a cautious fashion in 2009," KPMG's venture capital practice co-leader Brian Hughes said.
"Our 2010 data shows that investors are more bullish in their investment projections and with all the federal funding and programs, the green-tech sector will undoubtedly benefit from the improving investment environment," Mr Hughes added.
Outside the US, venture capitalists expect green-tech investment to be focused primarily in Asia and then in Europe.
In addition to the expected increase in venture investment in 2010, respondents in the KPMG survey agreed that the government would play an increased role in green-tech activity.
As much as 65% of those surveyed anticipate an increase of federal funding for green-tech initiatives and 92% expect more public-private partnerships to initiate green projects.
KPMG conducted the survey in conjunction with AlwaysOn, a venture capital new media organisation.