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Venture funding up significantly in Philadelphia area
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Venture funding increased slightly nationwide but was up significantly in the Philadelphia metropolitan area in the first quarter, according to the latest MoneyTree report.
Venture capitalists invested $5.87 billion in 736 deals in the first quarter, according to the report, which is put out by PricewaterhouseCoopers LLP and the National Venture Capital Association with data from Thomson Reuters.
The amount of money invested was up 5 percent but the number of deals was off 11 percent from the fourth quarter of last year when VCs invested $5.59 billion in 827 deals. Dollar investment was up 14 percent and deals were down 7 percent from the first quarter of 2010, when VCs invested $5.17 billion in 787 deals.
In the Philadelphia metro area, which comprises eastern Pennsylvania, South Jersey and Delaware, VCs invested $149.6 million in 22 deals in the first quarter. Those figures represent a 56 percent increase in dollars invested and a 33 percent decline in deals from the fourth quarter of 2010, when VCs invested $95.9 million in 33 deals involving Philadelphia metro companies, and an 82 percent increase in dollars invested and a 19 percent decrease in deals from the first quarter of 2010, when VCs invested $82.4 million in 27 deals involving Philadelphia metro companies.
The 22 deals involving Philadelphia metro companies in the quarter were the lowest since 15 in the first quarter of 2009. The amount invested was higher than in all but one quarter last year and beat the amount invested in half the quarters in 2009.
The amount invested in Philadelphia metro companies last quarter got a big boost from a $45.7 million investment in a Lehigh County company, CyOptics Inc., a Breinigsville, Pa., maker of optical networking components. That was one of six deals of more than $10 million involving Philadelphia metro companies in the quarter.
The others:
• A $23.3 million funding of BioNanomatrix Inc., a Philadelphia company that is developing a genome analysis system;
• A $15 million financing of Ophthotech Corp., a Princeton, N.J., biotech company developing treatments for back-of-the-eye diseases;
• A $15 million funding of Viridity Energy Inc., a Conshohocken, Pa., provider of power-management software and services;
• A $14 million financing of Lightwire Inc., an Allentown, Pa., developer of interconnects for next-generation networking, communications and server/storage systems;
• And an $11 million funding of Core Essence Orthopaedics Inc., a Fort Washington, Pa., medical-device company.
The $45.7 million investment in CyOptics made networking and equipment the industry that received the most money in the area last quarter, but biotech came in a close second with $44.8 million. The biotechnology and software industries had the most deals, with each receiving six.
VCs invested the most money, $92.2 million in the quarter, in later-stage deals, which is typical, and did more later-stage deals, eight, than any other type of deal, which is not. There were seven early-stage deals totaling $43.2 million, four expansion deals totaling $13.2 million and three startup/seed deals totaling $850,000 in the quarter.
Nationally, the quarterly deal count was the lowest number in a single quarter since the third quarter of 2009. But the first quarter of this year marks the first time in four years that the amount invested in the first quarter was up from the amount invested in the fourth quarter immediately prior to it.
The software industry had the most deals, 187, and garnered the most money, $1.1 billion.
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