The communications and networking sector attracted the largest increase in US early-stage venture capital investment in the first quarter of the year amid a 26% drop in overall investment, according to a new survey from VentureOne and Ernst & Young.

Investment in the communications sector rose from $1.5bn (€1.7bn) in the fourth quarter of last year to $1.6bn in the first quarter of 2002, driven by the connectivity components industry. The sector included the quarter's five largest deals, the largest being the $120m fourth round of financing for Caspian Networks, the switching devices developer.