NYC VC

Does New York Tech Need More (Industry) Diversity?

united colors benneton Does New York Tech Need More (Industry) Diversity?

"You'll fund my mobile app? Terrific!"

With some big name IPOs getting off to a hot start, venture capital firms went all in on during the second quarter of 2011. New data from a MoneyTree report that pulled info from PriceWaterHouseCoopers, the NVCA and Reuters, found that VC funding jumped 18.7% in Q2, reaching its highest level since the 2008 economic crisis began.

Interestingly software was the leader in terms of dollars received. It beat out more capital intensive sectors with 25% market share ($1.5 billion), followed by biotech ($1.2 billion), medical devices/equipment ($840 million) and IT services ($763 million).

In the short term this is a good thing for New York, which has a robust ecosystem for software companies, but still hasn’t found its footing in the world of biotech. But in the long run it could be a risk factor. “NYC needs more sector diversity, like cleantech, biotech, infrastructure, ” tweeted Silicon Valley Bank’s Shai Goldman, pointing to a NY Post article that reported that in New York, internet and mobile startups grabbed 63% of the funding.

“Of course, this lack of sector diversity could be bad if reality doesn’t live up to expectations,” CB Insights CEO Anand Sandwal told The Post. “We need to start building a biotech and energy tech sector,” wrote Fred Wilson in an email to The Post. “Boston and Silicon Valley are way ahead of NYC in these areas. “

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