Venture capital investment in the US was lackluster in 2013 but was on its way up as investors showed strong interest in second rounds, The Wall Street Journal blog Venture Capital Dispatch reported. Citing data from DJX VentureSource, owned by Dow Jones & Co, the report said that last year, overall investment in venture-backed firms was at $33.08 billion, representing only a 1% increase from the figure posted in 2012. However, investment in the fourth quarter increased 7.3% to $8.89 billion compared to the same period the year before which suggests increasing investor confidence.

With a drop in seed rounds and first rounds, investors supported fewer firms last year. Only 3,480 financings occurred in 2013, representing a 4.6% drop from 2012 figures. Deals increased 3.3% in the fourth quarter of last year with 901 financings recorded compared to those made in 2012, the report said.

People were not looking to 2013 to become a successful year for venture capital investment even if the venture-backed IPO market marked the best in six years. Venture fundraising was only able to come up with $19.66 billion which represented a 10% drop from the year before. Mergers and acquisitions activity also remained tepid, the report said.

Venture capitalists continue to become attracted to services geared towards businesses. Investment given to business support firms increased 31.9% to $5.97 billion. There were 624 deals made in this industry segment which represented a 21.9% increase, the report said.

In the consumer information services industry, the number of deals last year declined 15.4% to 438 but investment increased 15.4% to $3.56 billion as investors seemed to avoid early-stage financings and poured money on those firms that were already getting a toehold in the market. For these firms, the number of second rounds increased 47.9% as seed rounds declined 52.2% and first rounds dropped 27.9%. All in all, second round investments went up 28.7% to $6.64 billion and financings also increased 19.1% to 729 last year, the report said.