VC Funding for FLOSS Dips in 2009: Rebound in 2010?

by Ostatic Staff - Apr. 07, 2010

The 451 Group's Matthew Aslett reports that venture capitol funding is down for open source vendors in 2009, as expected. The good news is that the drop wasn't quite so steep as initially thought.

But the good news is that open source vendors pulled ahead of the pack. Aslett writes that "OSS-related vendors fared better in terms of investment compared to software as a whole." This takes into account 67 deals, with a dip of 25% year over year from 2008. The total investment bill came in at about $375 million.

That is, of course, a tiny fraction of the overall funding. And there seems to be more on the horizon. According to Dow Jones, there was a significant bump in VC funding year over year for Q1 2010. Funding was up to $4.1 billion across 34 funds in Q1 of this year, against $2.9 billion in Q1 of 2009. Whether that will translate to a banner year for open source plays still remains to be seen.

It seems to have been a busy year for funding announcements so far. MuleSoft has raised $12 million in series C funding, DotNetNuke has raised $8 million in second round funding, Lucid Imagination (which works with Apache Lucene and Solr) has raised $10 million this year.

Generally, not terribly exciting for tech-heads in the audience, but the funding means continued investment and development of open source. The investments also reflect the industry's continued support for the open source development model and companies building business models around that.

Image courtesy of AMagill on Flickr.