-- Reflecting global VC trends, nanotech funding fell 42% to $792 million in 2009. Despite the drop in overall value, the number of deals in 2009 actually increased slightly to 92, as VCs distributed the wealth more broadly. Specifically, they bid farewell to mega deals, slicing average deal size by 41% to $8.6 million. -- Series D or later investments plunged 73% to $235 million. After a year of triple-digit investments in single companies, the Series D party ended in 2009. In contrast, Series B rounds surged 49% to $339 million and almost reached parity with Series C and later rounds, which collected $376 million. As in 2008, Series A walked away with the smallest portion at 7% or $56 million. -- Most VCs expect near term funding to decrease or remain flat. Some 53% of VCs interviewed said they expected their peers would likely maintain existing portfolios rather than pursue new deals. Less than half of those interviewed predicted their investments would increase over the next two to three years.Despite the gloomy outlook, nanotech will survive. While VCs play a crucial role in providing investments for early-stage companies and guiding them to exits, VC backing is only a small piece of the funding puzzle. "Unlike corporate or government investors, VCs tend to accept more risk and fund early stage companies," said Bradley. "That helps explain their increased interest in nano-enabled healthcare. Although the long cycles imposed by clinical trials increase the risk of funding these start-ups, healthcare is a premium-based sector where margins are high." "2009 Nanotech Venture Capital: Healthcare and Life Sciences Provide Life Support" is part of the Lux Nanomaterials Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Nanomaterials Journal, and on-demand inquiry with Lux Research analysts. About Lux Research Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients. Visit www.luxresearchinc.com for more information.
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