BOSTON (AP) — Venture capitalists poured nearly $1.6 billion into 169 New England companies during the fourth quarter of 1999, with software and Internet services for business leading the way. Internet-related investments comprise 63.2 percent of all money invested in the region during the fourth quarter, according to a Boston Globe/PricewaterhouseCoopers Money Tree Survey.
“Internet-related companies offer so much potential so quickly that they now attract the lion’s share of the investing,” Patrick Gray, PricewaterhouseCoopers partner, told The Boston Globe.
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For the year, New England companies received $4.1 billion in venture capital, second only to Silicon Valley, which received $13.4 billion.
“If you have a sound business idea and you live in the New England area, you can get money,” Gray said.
“Everything is getting funded,” said Oliver Curme, partner at Battery Ventures in Wellesley, which invests in one out of every 300 deals it looks at. Battery’s rejects, however, find money elsewhere, Curme said.
New England did grow more slowly than other regions. With 104 percent growth, the region lagged New York, with 250 percent growth, Los Angeles, with 200 percent growth, and Silicon Valley, with 195 percent.
Gray suggested New England companies tend to be left out of the biggest deals.
The largest New England deal at the end of last year was the $70 million in financing invested in HarvardNet Inc., a networking and equipment company based in Portsmouth, N.H. Waltham software maker InfoLibria Inc. came in second with $50 million.
In contrast, California-based CarsDirect.com and Colomotion Inc. both obtained more than $200 million each.
Nationally, venture financings broke every record in the book, increasing 150 percent over the previous year to $35.6 billion.
“We expected 1999 to be big, but this figure surpassed even our most aggressive estimates,” Gray said.
The downside to the venture financing boom is increased concern among investors.
“Everything is accelerated,” said Kenneth Mabbs, director of merchant banking for First Albany Corp. “There are definitely going to be lots of blowups. I think you’re already seeing it in the ‘b-to-c’ side.”
Business-to-consumer Internet companies have stumbled of late. FogDog, Inc., an online sporting goods retailer that went public recently has had flat share prices.
