IT continues to be the leading sector, raising $21 billion this quarter, and is led by the software subsector. Business and financial services remained in second place, attracting some $19 billion in funding. Health and life sciences rounded out the top three, raising $15 billion in proceeds, with biopharma driving the results.
This is what we have seen consistently for the past several years, and it is due to several themes that have very long tails. In IT, software has become all consuming. More companies continue to move to the cloud and are replacing hardware with software products in IT infrastructure. At the same time, other industries are embracing technology in the form of new software products, which will continue to drive record venture investment in IT for the foreseeable future. Also contributing to the growth in this sector are additional privacy and security needs as more data goes into the cloud.
In business and financial services, the growth is driven by FinTech, both on a business-to-business side and the consumerization of financial services. Legacy financial institutions continue to invest in new technology along with new products and services aimed directly at consumers. Other factors include technology-enabled banks, insurance companies, investment platforms, and new forms of currency and assets (have you gotten your NFT (Non-fungible token) yet?).
Finally, in health and life sciences, we constantly see novel approaches to cure diseases and enhance quality of life. While we have mapped the human genome, we still have a long way to go before we can provide truly targeted medicine on an individual basis. These opportunities will take decades and billions of dollars to realize.
The energy and utilities sector made a cameo this quarter, with 2 of the top 10 deals in the nation. One company that specializes in recycling electric car batteries just raised $700 million in a single round. As investors take aim at solving the climate crisis, this also provides a decades-long investment opportunity as long as the returns prove to be there.