Europeans VCs flock to Web 2.0

Investment doubled to £25.7m over the first half of the year

Venture capitalists doubled their funding for European Web 2.0 projects during the first half of 2007.

Private investment rose to $51.5m (£25.7m) according to Dow Jones VentureOne and Ernst & Young. Private funding from backers in Israel and China leapt almost 60 per cent to $107m (£53.6).

The growing interest in Web 2.0 follows a surge in the popularity of consumer social networking and mash-up sites, which are increasingly being adapted to the corporate market.

The success of US-based ventures is encouraging investors to back similar projects around the world, as was the trend during the first "dotcom" rush in the late 1990s. At its height, global web investment topped $100bn (£50.1bn).