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Open Source Venture Funding in Q2: Up Again

There is more good news for open source on the venture capital front. Following record inflows for venture capital into open source for the first quarter, The 451 Group is reporting that VC funding levels rose again in the second quarter as compared to last year. Funding rose just under 14 percent to $115 million, compared to $101.5 million in 2007. Here's the really striking stat: "Total funding for the first half of the year to date stands at $321.3 million, up 62 percent over the first half of 2007, just shy of the $328.5 million raised in the whole of last year."

 The 451 Group also notes that the end of the second quarter brought a flurry of investments. Funambol raised $12.5 million, rPath raised $10 million, Springsource raised $15 million (as we covered),  Optaros raised $12 million, and Neocleus raised $11.4 million. All those investments came over the course of nine days at the end of the quarter. Among other notable investments for the second quarter, SpikeSource raised at least $10 million in April, and Openbravo raised $12 million in May, notes The 451 Group.

The 451 Group does note one negative trend, though, having to do with early stage investments, which was also true last quarter: "Once again the level of disclosed Seed and Series A funding deals was disappointing, however, with just two announced deals in the quarter (Marketcetera and Grou.ps) worth $5.1 million, compared to eight deals worth $42.8m in the same quarter last year." As Matt Asay notes, venture-backed companies are having a tough time finding public exits: "In the second quarter, there were exactly zero IPOs for venture-backed companies--whether they were open source or otherwise," he says. In the overall sense, though, the funding horizon for open source looks rosy, as seen here (graphic provided by The 451 Group):

• SpikeSource
• MarketCetera
• Funambol
• Openbravo
• SpringSource
• rPath

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