Since its most recent peak in 2008, the volume of pure tech investments has continued to decrease across Europe, leaving the support services sector to take over as the most popular investment area. Anneken Tappe reports

The decrease in pure tech investments stands in contrast to the assumption that another boom of computer- and internet-related businesses is dawning. Since 2010, the support services sector has overtaken tech investments in deal volume, while still attracting comparatively larger average investments.

The software & computer services sector has been prone to attract more but smaller investments. The pharmaceuticals sector has also seen decreasing numbers for a substantial period of time now, yet tech and healthcare are still deemed to be investment "safe havens". Deals in those areas should therefore be picking up and not the opposite.

Reasons for this behaviour may be found in the prevailing economic conditions in Europe; as limited financing options and a slow growth forecast are leaving investors wary, deal volume has decreased overall. This shows that even preferred investment sectors are not recession-proof, but it does not give much of an indication of trends in case of an economic recovery in 2012.

However, is focusing solely on pure tech investments missing the point? New technologies and internet-related innovation have become increasingly pervasive, impacting and creating new business models in many traditional sectors of activity. Venture players may shy away from semiconductor businesses or telecoms equipment manufacturers – but they increasingly turn their sights onto digital media publishers, internet-only travel agents or e-commerce companies.

Meanwhile, the industry landscape stayed fairly stable between 2010 and 2011 sectors-wise. Support services, software & computer services, general retailers, healthcare equipment & services and pharmaceuticals & biotechnology remain the most active sectors overall – as they already were last year – although dealflow slowed down for each of them..

Considering sub-sectors, business support services is the only area in which activity has picked up; the number of deals rose from 105 in 2010 to 131 in 2011.

The list of sectors attracting the most capital changed slightly in 2011 compared to the previous year. Investments in travel & leisure and industrial engineering were replaced by electronic & electrical equipment and general industrials. Meanwhile the overall value of deals in the healthcare equipment & services sector went down by nearly 10%.