Venture capital firms invested $17.7 billion last year, down from $28 billion in 2008, the lowest investment since 1997, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.
The number of deals also declined, to 2,795 in 2009 from 3,895 the year before.
Venture capital firms invested $5 billion in 794 deals in the fourth quarter, down from $5.9 billion invested in 910 transactions in the fourth quarter of 2008. Investment in one of the hottest sectors, clean technology fell 53% to $1.9 billion from $3.98 billion. The number of clean-tech transactions also dropped, to 185 from 268. Investment in almost every sector tracked by the MoneyTree Report, including biotechnology and software, dropped last year.
The largest deal last year was a $286 million investment in the third quarter by venture capital firms Argonaut Private Equity, Redpoint Ventures, RockPort Capital Partners and U.S. Venture Partners in Solyndra, a company that designs and manufactures photovoltaic technology for solar energy.