IT Companies Snag Funding, Web Startups Not so Much

Stories such as Andreessen Horowitz making $78 million off an early $250,000 investment in Instagram capture the public imagination.

However, venture capital grew for young IT companies in the first quarter, especially those working on enterprise software, while it declined for flashy Web startups, Computerworld
reports. In a quarterly survey by Dow Jones VentureSource, $2 billion
was invested in 257 deals with young IT companies, a 14 percent increase
in dollars and a 2 percent increase in the number of deals over the
same period a year ago. Enterprise software companies made 196 deals for
a total of $1.3 billion, a rise of 6 percent in deals and 61 percent
more money than a year earlier. The bulk of that investment was aimed at
application development, which I read to mean jobs for developers and
project managers.

Meanwhile,
Internet companies attracted $375 million in 88 deals, a decline of 76
percent in money and 17 percent fewer deals. The report found that
investment overall fell 18 percent from last year, totaling $6.3 billion
for all business sectors.

Meanwhile, an infographic released last week on U.S. startup hubs by Venture 51, an early-stage venture fund based in Scottsdale, Ariz., shows the Midwest far outpacing the rest of the country in growth, as Silicon Prairie News
touts, but it's based on 2005-2010 data and the graphic notes that
almost all regions except New York City have seen a drop in new deals.

Those Silicon Valley startups continue to raise money, though, which means hiring. A Wall Street Journal article points to these in particular:

• Yummly
  in Palo Alto, Calif., which is creating a searchable database of
  recipes, recently raised $6 million. It plans to hire 30 people in the
  next year, tripling its headcount, and is seeking people skilled in data
  science, natural language processing and machine learning.

• Adaptive Planning,
  in Mountain View, Calif., recently raised $22 million to scale up its
  business in budget-planning software. It will hire 65 this year. It's
  looking for engineers with experience in Java and quality assurance, as
  well as salespeople.

• Appirio,
  San Mateo, Calif., raised $60 million in March to help companies plan
  their cloud computing strategies. It will hire 200 people including
  engineers with cloud experience, quality assurance engineers and
  architects.

• Jumio,
  Mountain View, Calif., raised $25 million to further its mobile payment
  strategy. Among the 30 hires it expects to make this year will be Java
  developers, computer graphics specialists and engineers with experience
  in object recognition codes.

source: http://www.itbusinessedge.com/cm/blogs/hall/it-companies-snag-funding-we...