Friday, July 19, 2013

VC funding soars in Florida

By Nancy Dahlberg

Venture capital funding in Florida soared in the second quarter of 2013, thanks to large investments in two Miami-based companies.

According to findings of the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association released on Friday, investment in the state totaled $155.8 million, up from just $11.29 million in the first quarter and the highest amount recorded in the survey since the third quarter of 2007.

Florida’s total was powered by the $65 million Series D round in Open English — the 7th largest investment in the country — and the $20 million round in CareCloud, the top two investments in the state.

Nationally, venture capitalists invested $6.7 billion in 913 deals in the second quarter, according to the report, based on data provided by Thomson Reuters. Quarterly venture capital investment activity rose 12 percent in terms of dollars and 2 percent in the number of deals compared to the first quarter of 2013.

A few second-quarter national highlights from the survey:

•  The software industry received the most funding, despite dropping 7 percent from the prior quarter to $2.1 billion, marking the fifth consecutive quarter of more than $2 billion invested in the sector.

•  Biotechnology was the second largest sector for dollars invested with $1.3 billion going into 103 deals, rising 41 percent in dollars and 4 percent in deals from the prior quarter. Of the deals, 71 were in medical devices, an area of strength in South Florida.

•  Early-stage investments rose to their highest level in six quarters, up 63 percent in dollars and 18 percent in deals to $2.5 billion going into 480 deals. The average early-stage deal was $5.2 million, up significantly from $3.7 million in the prior quarter.

•  First-time venture capital increased 24 percent to $1.1 billion going into 302 companies, a 10 percent increase in the number of deals from the prior quarter. First-time financings, particularly software companies, accounted for 17 percent of all dollars and 33 percent of all deals in the second quarter.

“In many ways it feels like the late 1990s with information technology driving venture investment and significantly outpacing other sectors when it comes to level of activity and momentum,” said Mark Heesen, NVCA president. “The difference, however, is where we go from here. There will be no tech bubble. IT investing will continue to be the bedrock of the venture industry — but at sustainable levels. Life sciences investment is poised for a slow and steady recovery, provided we can continue to see progress on the regulatory front.”

According to the survey, 14 Florida companies received venture capital in the second quarter, up from six in the first quarter and the highest number in more than two years. In addition to Open English, an online language school marching across Latin America and beyond, and CareCloud, a fast-growing software and services provider for the healthcare industry, the other South Florida company funded was of Miami, which received $400,000. Other Florida companies that were funded were Kony Solutions, Tower Cloud, Applied Genetics Technologies, Informed Medical Decision, Treehouse Island, XOS Digital, Zentila, SiteWit, Health Integrated, Fracture and Unikey Technologies.

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