Investment in web startups increases

Data shows boost in funding for new online businesses in Europe

More cash is being made available to new European startups

European internet startup companies have attracted twice the level of investment across the second financial quarter of 2007, compared with the equivalent period last year.

According to data from equity research firm Library House, €150m was invested in new European web-based firms, a steep increase from the €51m spent in the first quarter of the year, and the €64m of venture capital supplied in the second quarter of 2006.

Among the most successful new companies was Joost, the new IPTV (Internet Protocol Television) project from Janus Friis and Niklas Zennström, the founders of Skype. Joost brought in €33m in outside investment.

The increased figures for online ventures contrast with the decreasing numbers for overall funding, suggesting that investors may once more regard the web as potentially fertile ground. The overall total for European investment stands at €1.4bn, down over 17 per cent from 2006.

The UK retained its place at top of Library House's venture capital league for Europe, having attracted €392m. France fared the worst on a national level, with venture investment dropping to just under €100m – less than half the amount from the previous year.