NEW YORK (AP) — Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.
Startup investments totaled $9.47 billion in the first three months of the year, up from $6.01 billion in the first quarter of 2013. It was the highest since the second quarter of 2001, when investments reached $11.5 billion.
There were 951 deals completed in the quarter, up from 916 in the same period a year ago.
Software companies received the most money — $4 billion. Biotech was a distant second with $1.06 billion. The last time the software sector received this much money was in the fourth quarter of 2000, right as the dot-com bubble was about to burst.
The sharp increase in venture funding in the first three months of the year comes amid a cooling of investor sentiment toward publicly traded technology stocks. Since March, shares of companies such as Netflix, Twitter and Facebook have sagged. With some technology stocks down as much as 40 percent, as in Twitter's case, the sharp decline is raising questions about whether the downturn is temporary or a sign that another bubble is about to pop.