VC flow levels out: $8 billion in 776 deals in Q2

Dow Jones VentureSource data looks good for venture capital as a whole, but Consumer Services bubbly

After a serious drop in deals and dollars invested in 2009, venture investment flow more or less rebounded last year to its 2008 levels. In 2011, the numbers are so far looking to be consistent with last year’s.

In Q2 of this year, 776 deals collected $8 billion, a five percent drop in investment and two percent drop in deals compared with last year, according to Dow Jones VentureSource. For the entire first half of 2011, 1464 deals brought in $14.9 billion, versus $13.3 billion from 1431 deals in the same period last year.

So, according to the trends, things are levelling out for venture capital.

For the IT industry specifically, there were 255 deals done in the last quarter, versus 242 in the same period last year. Total capital raised in the sector also remained relatively static, with $2.3 billion for 2011 and $2.1 billion for 2010. That comes to a deal increase of five percent and a capital increase of nine percent.

The industry everybody wants to invest in, Consumer Services, experienced the largest spike. (Consumer Services is the bubbly little sector that includes all our favorite social media companies and other consumer-facing Web startups.)

In Q2 2011, Consumer Services saw 138 deals done, versus 129 the year before. Even more astounding: capital raised jumped from $877 million a year ago to $1.3 billion last quarter. That’s a 51 percent hike in capital activity.

Did someone say “bubble”?

Some of the largest most recent rounds we’ve covered include three $50 million rounds from note-taking service Evernote, location startup Foursquare and social gamers Kabam. Oh, and there’s Airbnb, Square and LivingSocial too.

Meanwhile, we’re still waiting for Dropbox to raise some (rumored) giant round that values the company at $10 billion, along with several other startups with sky-high valuations and rounds in the works.