Median pre-money valuations of US and European countries have returned to old highs according to Dow Jones VentureOne.
The investment group says that US venture-backed companies hit a five year high of $18.4 million in the first quarter of 2006, while European median valuations were €6.1 million, the highest since 2000.
Explaining the rise was Steve Harmston, director of global research at VentureOne: "Investors are affixing higher valuations to later-stage IT and healthcare companies as they continue to place bigger bets on the most promising startups nearing exit in these segments.
"For example, the median later-round healthcare valuation was $57 million in the first quarter, up from $45.7 million a year ago. The median later-round IT valuation was $43 million, up from $24.7 million in the first quarter of 2005."
Previous median pre-money valuations highs came in 2000 – 2001, but Mr. Harmston believes that liquidity levels are finally returning to these highs after the recent dip.
In Europe, the UK posted the highest valuation in the first quarter at €9.6 million, up from €4.4 million only a year ago. While France's median valuation also climbed, Germany's declined from €8.4 million to €5.8 million in the same period.
Over in the US, communications companies experienced the largest increased median valuation, which rose from $29.9 million in 2005, to $82.8 million.
Overall, median premoney valuation in the US increased for all round classes except first rounds, while in Europe median valuation increased for all round classes as both sides of the Atlantic return to old highs.