Funding for social, gaming triples to $875M

LivingSocial, Beyond Oblivion, OnLive, TidalTV and Lockerz top the list of biggest consumer rounds

Consumer information service companies, those in the exploding social media, gaming and e-commerce markets, raised $875 million for 81 deals in the first quarter of 2011, according to data released by Dow Jones VentureSource on Thursday. That’s triple the amount raised during the same period last year.

The capital raised by those companies makes up almost three quarters of the entire Consumer Services industry’s new funding, which totaled $1.2 billion over 106 deals, more than doubling the $517 million raised over 102 deals in Q1 2010.

Here are the five largest rounds raised by consumer information service companies:

1. Hungry Machine, the company behind daily deals site LivingSocial, raised $200 million in new funding from existing investors Amazon and Lightspeed Venture Partners along with some new participants. The number reported in the media a couple weeks ago was actually $400 million, but the extra $200 million went toward share repurchasing, a Dow Jones representative tells me. Since it’s capital used to purchase shares from existing shareholders, the firm doesn’t count it towards new funding. (Washington, D.C.)
2. Digital music marketplace Beyond Oblivion raised a $77 million round led by Rupert Murdoch’s News Corp. (New York, N.Y.)
3. OnLive, provider of an on-demand game service, raised $40 million from smartphone maker HTC. (Palo Alto, Calif.)
4. Video advertising optimization company TidalTV raised $30 million led by New Enterprise Associates with participation from Comcast Interactive Capital and Valhalla Partners. (Baltimore, Md.)
5. Social commerce site Lockerz also raised $30 million--of a planned $45 million--from Liberty Media Corporation and Kleiner Perkins Caufield & Byers. (Seattle, Wash.)

As evident in the four of the rounds above, it’s not just VCs and an ocean of angels pouring tons of extra funding into companies these days, but also major corporations like Amazon, News Corp., HTC and Comcast.

“Large deals for capital-intense industries -- such as renewable energy, healthcare and information technology -- drove the investment increase in the first quarter,” noted Jessica Canning, global research director for Dow Jones VentureSource. “Venture capitalists, however, were not the only investors giving venture-backed companies sizable cash infusions. With acquisition prices on the rise, corporations are more inclined to invest and they funded three of the 10 largest deals confirmed during the quarter.”

In total, corporations, venture capital firms, angels and the rest invested $6.4 billion in 661 deals for U.S.-based venture companies during Q1 2011, according to Dow Jones VentureSource, a 35 percent rise in investment and five percent decrease in deals when compared with the same quarter last year. The median amount for a round rose to $5 million, a slight increase from $4.4 million a year ago, but about the same as the 2009 figure.

Investment deals in the healthcare sector raised $1.6 billion over 148 deals, a 21 percent increase in capital but a six percent drop in deals. IT companies raised $1.6 billion over 212 deals, a 16 percent increase in capital and 10 percent increase in deals. And energy companies raised $742 million over 33 deals, nearly doubling capital invested in Q1 2010.

Overall, seed/first-stage rounds and later-stage rounds accounted for about the same number of deals, 38 percent and 40 percent respectively. Early-stage brought in 16 percent of capital invested and later-stage brought in 64 percent. Second rounds accounted for 18 percent of capital and 20 percent of deals.