Funding for OSS-related vendors surpasses $4bn following stellar Q4

When the figures for Q3 showed venture capital funding for open source software-related vendors declined 38% in the third quarter I all-but abandoned my prediction that venture funding in 2010 would match the levels seen in 2009.

At that stage it looked like we would have to see a rapid increase in funding in the fourth quarter to get anything near the $394m raised in 2009. That is precisely what transpired, however.

According to preliminary figures collated by The 451 Group, $151.9m was invested in open source software-related vendors in Q4, a 74% increase on the $87.3m raised in the fourth quarter of 2009.

In fact, the fourth quarter of 2010 was the largest single quarter for investment in open-source-related vendors since the second quarter of 2008, and the fifth largest quarter ever.

There were 16 deals in the quarter and 14 with a disclosed deal size, resulting in an average deal size of $10.8m in 4Q10. That compared with 19 deals in the quarter and 18 with a disclosed deal size, resulting in an average deal size of just $4.9m in 4Q09.

Significant early stage deals announced in the quarter included $4m for CloudBees, while the largest later-stage deals included $34m for Talend, and $25m for Cloudera.

For the year as a whole private investment for open source software-related vendors grew 18% to $466m in 2010 – the third largest annual total ever – following a 37% decline to $394m in 2009.

The fourth quarter total also means that total private investment in open-source-related vendors has surpassed $4bn since 1997 – from 543 deals and 216 different vendors.

451 Group clients can read our full assessment of venture funding for open source software-related vendors in 2010, including details of the investment pipeline, and an explanation as to why we are predicting funding to be in the region of $500m in 2011. Non-clients can apply for trial access using the same link.

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#1 Tweets that mention 451 CAOS Theory » Funding for OSS-related vendors surpasses $4bn following stellar Q4 -- Topsy.com on 01.12.11 at 12:54 pm

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#2 Open Source, we are buying, but are we engaging? at OSS Watch team blog on 01.17.11 at 8:28 am

[…] This is a pattern that is also visible in non-academic sectors. Put simply people are becoming increasingly comfortable with open source as a viable way to develop software, although there is still room for improvement where suppliers are concerned. As a result new companies are springing up to fill the gap and  venture captialists are happy to support them as shown by the increasing level of investment in open source related companies. […]

#3 Open source has become mainstream but still drives innovation | Technology News on 05.02.12 at 5:26 pm

[…] world; more and more funding. The 451 Group tracks the history of VC funding in open source – the graph in this post shows that investment in 2008 was at an all-time high, which would only be matched again in […]

#4 Open source has become mainstream but still drives innovation | Človíčci.cz on 05.02.12 at 9:51 pm

[…] story of VC appropriation in open source – the graph in this post shows that investment in 2008 was at […]

#5 Open source has become mainstream but still drives innovation | EnergyPorn.com on 05.03.12 at 12:36 am

[…] story of VC appropriation in open source – the graph in this post shows that investment in 2008 was at […]

#6 Open source has become mainstream but still drives innovation | HotAgency.eu on 05.03.12 at 9:49 am

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#7 Open source has become mainstream but still drives innovation | 123prodáno.cz on 05.03.12 at 4:56 pm

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#8 Open source has become mainstream but still drives innovation | AmorůvŠíp.cz on 05.03.12 at 8:52 pm

[…] story of VC appropriation in open source – the graph in this post shows that investment in 2008 was at […]

#9 Open source has become mainstream but still drives innovation | 1Angels.com on 05.04.12 at 2:53 pm

[…] story of VC appropriation in open source – the graph in this post shows that investment in 2008 was at […]

#10 Open source has become mainstream but still drives innovation | Techie Today on 06.02.12 at 12:27 pm

[…] world; more and more funding. The 451 Group tracks the history of VC funding in open source – the graph in this post shows that investment in 2008 was at an all-time high, which would only be matched again in […]

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