I read this Business Insider piece over the weekend titled: “Here’s Why It’s Ridiculous To Say The Fed Is Blowing A Tech Bubble”

In the piece, the author points to PriceWaterhouseCooper’s report tracking VC funding, by sector, over the last 10 years. He points out that while software has seen a precipitous spike in the last few years, healthcare, financial services, biotech have all stayed relatively steady in terms of attracting funding.

His greater point, that low interest rates and the Fed buying up bonds haven’t flooded the market, is interesting. Some data seems to contradict this. Dan Primack at Fortune reports that the glut in dry powder for private equity today is one of the largest in recent memory, topping $1 trillion. The Wall Street Journal points to record-setting profits driving the continued institutional appetite in private equity. It’s my opinion that the dry powder is indeed related to the tactics employed during the financial recovery, and attempts to stimulate the economy. I take it further and happen to think that monetary stimulus outstripping infrastructure stimulus is a further cause of this dry powder explosion. But regardless, the data does show that most VC investment sectors have stayed steady… except tech, which has, indeed, grown (highest levels since 2001) – and, as the author points out, specifically in software. This does not a bubble make. But it does warrant some further investigation.

I wonder if, in the ‘financial services’ sector, software-powered businesses like LendingClub, Propser, Upstart, Inventure, Earnest, Mirador, Bond St, etc. qualify?

I wonder if, in “healthcare”, software-powered businesses like Castlight, Sherpaa, Doctors Know Best, SharePractice, Figure1, etc. qualify?

As for “biotech”, is the software-enabled citizen science revolution of 23andMe, Science Exchange, Experiment, uBiome, part of that sector?

Part of this story, it seems, is that ‘tech’ increasingly represents a broader and deeper cross-section of other industries. Doctors, scientists, and financiers are writing code into their innovations as a de rigueur feature of their innovation. It’s a cliché today that “software is eating the world”, but it seems some journalists forget that when they look at the data.

What do y’all think?