Web 2.0-Type Fundings At $844 Million in 2006

So says a new report by Ernst & Young and Dow Jones VentureOne…$844.4 million was directed into 167 deals last year, more than twice as much money and nearly twice as many deals as occurred in 2005. Of course, what definitions here are gray, and here’s how the report defines Web 2.0 sector: “Companies included in this study have a business model that revolves around a dynamic interface facilitating participation through such methods as user-created content, networking, and collaboration. Applications include podcasting, tagging, blogs, social networking, mashups, and wikis.” That’s pretty much defines almost all Web startups these days, but let’s play along.
And the report says this is not a bubble, and the rationale? The median pre-money valuation for a Web 2.0 company in 2006 was $6 million for both U.S.-based companies and worldwide. much less than the $18.5 million overall median pre-money valuation reported for U.S. venture-backed companies and also below the $7 million overall median pre-money valuation for European venture-backed companies.
— U.S. has with 126 deals and $682.7 million invested, an 83% increase in deals from 2005 and a 136% increase in capital.
— The most active investors in Web 2.0 on a worldwide basis are Benchmark Capital, Draper Fisher Jurvetson, Sequoia Capital, and Omidyar Network.
some good additional data and analysis on VentureBeat, including some excel sheets full of other data points.