Web 455 Million Point Zero?

Four Hundred Fifty Five million dollars. That’s the estimated investment made by venture capitalists in 79 Web 2.0 ventures, in the first three quarters of this year, based on a study by Dow Jones Venture One and Ernst & Young.

A related statistic – that Web 2.0 investments are 28% of an estimated $1.6 billion investment in technology startups – seems to be off. Intel’s venture capital arm is reported to have crossed the $1 billion mark; the bulk of it in WiMax oriented startups, including a $600 million investment in Clearwire. The overall Clearwire deal itself was for $900 million, which suggests that the $1.6 billion figure may be an underestimate.

Intel’s own disbursements of over a billion is a sharp jump over last year’s $265 million – a harbinger that venture financing is beginning to see an uptick similar to the dot com boom years. Looking at the Web 2.0 venture numbers, it doesn’t seem to be huge, though – an average of around $6 million. That would suggest average valuations in the region of $15 - $25 million per venture.

Putting some more numbers together; YouTube was funded through credit cards, Reddit’s supposed to have had a maximum of $100,000 in funding before it was acquired. In comparison, $6 million is quite large; either we’re looking at ventures that have significant growth already and need to make the quantum jump, or it could be for development funding for non-consumer type activities.

Either way, given the YouTube acquisition at $1.65 billion, there’s still potential appreciation for a diligent venture capitalist; even if only a few of these pay off, it could still make big bucks. I’m betting we’ll see bigger numbers soon.