According to a fascinating but not difficult to fathom report Friday from Ad Age, research shows that unprecedented investment capital is pouring into the social startup space.
As it turns out, the venture capitalists of the world have an insatiable appetite for this quickly expanding industry that is effectively on bubble-watch by Wall Street.
Bernhard Warner of Ad Age says the first quarter of 2011 alone saw private equity investors pump $1.6 billion into social networks. All the details are contained in Ad Age’s new “SMI Guide to Social Media Funding.”
To help illustrate just how massive that chunk of investment change really is, the latest PriceWaterhouseCoopers Money Tree report shows that VC funding for all privately held firms in the US in Q1 amounted to $5.9 billion.
The social networks sector wasn’t the only high-flyer. Investments in apps-makers (12 deals in Q1) and social marketing specialists (9 deals) were (and still are) in high demand. VCs closed 56 funding deals of “social” companies between January and March, totaling a combined $2.52 billion.
Facebook’s $1.5 billion funding round in January was the biggest in Q1, while a $1 million investment in Backtype.com was the smallest.
To download Ad Age’s free “SMI Guide to Social Media Funding” report, click here.