March 7, 2005 -- New research on venture-backed companies shows that valuations are climbed back to their 2001 levels. Does that mean the bubble is back?

Median valuations of venture-backed companies rose $3 million over the past year to reach $13 million in 2004, according to VentureOne, a division of Dow Jones. The study also said that early-stage venture-capital companies have rebounded to their highest valuations since 2002.

Biotech and IT firms had particularly strong years in terms of valuation to help drive the overall average higher. Valuations for first-round healthcare firms in general were even on par with their 1999 levels.

"These higher valuations were the result of investors showing interest in initial financing for healthcare and information-technology companies," said John Gabbert, VP research at VentureOne. "Both categories saw significant investment growth in 2004 at the early-stage level, and that is being reflected in the value investors are placing on these innovative startups."

Gabbert speculates that the more than $17 billion in new funds raised last year may have contributed to the overall increase in average valuation as investors bid against each other to nab the most promising prospects.

For the third year in a row, valuations remained flat for companies seeking second rounds of financing, according to the study.