Bill Sweeney
Senior Vice President
East Coast Regional Managing Director
City National Technology Group
(617) 380-5608
Bill.Sweeney@cnb.com

boston

Boston was a standout for venture capital financing last quarter, posting a robust year-over-year increase in dollars invested and keeping the region in second place nationally for venture activity, after only Silicon Valley.

In a switch, the New England capital’s strength owed largely to technology companies rather than the traditional leadership of health care businesses.

A total of $1.37 billion was invested by VC firms in Boston-region companies in the first quarter, up 45 percent from a year earlier and off 12 percent from the 2014 high-water mark of $1.55 billion in the fourth quarter, according to data firm CB Insights.

By contrast, venture investments nationwide last quarter totaled $11.3 billion, up 11 percent from a year earlier and down 18 percent from the fourth quarter. Silicon Valley companies took in $5.05 billion last quarter, flat with a year earlier.

Significantly, 93 Boston-area firms received financing in the first quarter, the same number as a year earlier and off slightly from 94 in the fourth quarter. Nationwide the number of deals was down 12 percent from a year earlier, paced by declines in key markets including Silicon Valley, New York City and Los Angeles.

In the fourth quarter, Boston’s list of biggest venture deals were dominated by biotech companies, reflecting its perennial leadership in that sector. But in the first quarter, six of the 10 largest deals were financings of tech companies — mainly those serving business, or “enterprise” users.

“Boston traditionally has been more about enterprise software than consumer software,” said Bill Sweeney, East Coast regional director for City National’s Technology Group. “That’s certainly where the strength was last quarter.”

The single largest Boston deal in the first quarter was a $175 million Series D investment in SimpliVity, a five-year-old Westborough, Mass., firm focused on simplifying information technology for companies. Its OmniCube system, for example, is an all-in-one box that combines servers, data storage and networking functions.

Onshape, a Cambridge, Mass., firm founded in 2012, got a $64 million Series C venture infusion. It has developed what website TechCrunch calls a “technological marvel,” or, online software that allows engineers worldwide to easily collaborate on product design in real time, via the cloud.

Meanwhile, in the biotech sector one of the region’s biggest deals last quarter was a Series E funding of $36.4 million for Chiasma. The Newton Center, Mass., firm is focused on designing pills to take the place of injections to treat serious diseases.

EQUITY FINANCINGS FOR BOSTON VENTURE-BACKED COMPANIES*

  1 Q 2015 4 Q 2014 3 Q 2014 2 Q 2014 1 Q 2013
Number of Financing Deals 93 94 71 102 93
Amount Invested ($MM) $1,369.4 $1,557.0 $681.1 $1,199.4 $947.6

TOP 10 DEALS IN BOSTON

COMPANY NAME DESCRIPTION CITY ROUND TYPE RAISED ($MM) INVESTORS
SimpliVity Provider of IT infrastructure for enterprises Westborough Series D $175 Kleiner Perkins Caufield & Byers, Accel Partners, Meritech Capital Partners, CRV, DFJ Growth Fund, Waypoint Capital
Altiostar Networks Mobile broadband solutions provider Tewksbury Unattributed VC - II $70 Cisco Investments
Onshape Cloud 3D CAD system for collaboration Cambridge Series C $64 New Enterprise Associates, North Bridge Venture Partners, Commonwealth Capital Ventures
Collegium Pharmaceutical Pharmaceutical company focused on chronic pain treatment Canton Series C $50 Longitude Capital, Frazier Healthcare, Boston Millennia Partners, Skyline Ventures, Aperture Venture Partners, TPG Biotech, Adage Capital Management, RA Capital Management, Rock Springs Capital, EcoR1 Capital, Eventide Asset Management
VMTurbo Software-defined control platform for cloud and virtualized environments Boston Series D $50 Highland Capital Partners, Globespan Capital Partners, Bain Capital Ventures, Iconiq Capital
Semma Therapeutics Develops therapies for Type 1 diabetes patients Cambridge Series A $44 MPM Capital, ARCH Venture Partners, Medtronic, Fidelity Biosciences
Nimbus Therapeutics Uses computational chemistry to design breakthroughs for the treatment of metabolic diseases and cancer, among others Cambridge Series B $43 Atlas Venture, SR One, Pfizer Venture Investments, Lilly Ventures, Bill Gates, Lightstone Ventures
Chiasma Develops oral medications for rare diseases that were previously available by injection only Newton Center Series E $36.4 MPM Capital, ARCH Venture Partners, 7 Health Ventures, F2 Capital, Abingworth, Sofinnova Ventures, Rock Springs Capital
Char Software Mobile application developer recently focused on enterprise automation systems Boston Series D $35 Foundation Capital, New York Angels, Polaris Partners
Localytics Enterprise mobile app analytics and app marketing provider Boston Series D $35 Foundation Capital, Polaris Partners, Sapphire Ventures

 

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