Investment in Boston-area companies climbed 17.6% to $797.5 million in the second quarter, defying a national decline in venture capital investment.
This quarter's financings represented the most money raised by Boston-area companies in a year, up ever so slightly (0.5%) from the $793.9 million raised in the second quarter of 2012.
This quarter was notable both for the size of some of the deals and for the return of early-stage investing. Boston's bright performance bucks the national downturn this quarter, in which venture capital investment posted its worst quarter in almost three years.
A total of 74 Boston-area firms received venture capital funding in the second quarter, a 2.7% increase from the 72 in the first three months of the year, and a 12% decline from the 83 companies raising funds in the second quarter of 2012. Based on those numbers, Boston ranked third in venture capital deal flow in the country, behind the San Francisco Bay Area and New York.
Despite a pullback in the overall level of investing later this year, Boston's biopharmaceutical and software sectors should continue to attract strong interest, and a stronger market for public offerings should continue to support deal flow in the area.
Capital efficiency continues to be important. While investment in capital-intensive deals such as clean technology has waned, other green industries in Boston continue to evolve, as evidenced by the largest deal in the second quarter:
- Blu Homes Inc., a Waltham, Mass., provider of energy-efficient, prefabricated homes, received $65 million in fourthround funding from Brightpath Capital Partners and the Skagen Group.
This was a standout, underlining one of the potential new directions in which Boston is headed.
Two other large deals from Boston's core sectors include:
- Affirmed Networks Inc., a provider of solutions for the mobile data space, which received $51 million in capital funding from a group that included Bessemer Venture Partners and Charles River Ventures.
- Extreme Reach Inc., a Needham, Mass.- based company offering video advertising and tracking across media platforms, which raised $50 million in fourth-round financing from Spectrum Equity Investors.
Nationwide, U.S.-based companies raised a total of $7.2 billion in the second quarter from 801 venture capital deals, a 0.5% dip in deals and a 2% decrease in capital investments in the second quarter.
The largest U.S. deal was for Fab Inc., a New York-based shopping site for design aficionados, which raised $150 million in fourth-round funding from a number of investors, including Andreessen Horowitz and Atomico
EQUITY FINANCINGS FOR BOSTON AREA VENTURE-BACKED COMPANIES*
|2 Q 2013||1 Q 2013||4 Q 2012||3 Q 2012||2 Q 2012|
|Number of Financing Deals||74||72||71||81||83|
|Amount Invested ($M)||$797.52||$656.72||$624.21||$749.89||$793.86|
TOP 10 DEALS IN BOSTON
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Blu Homes Inc.||Green home builder||Waltham||Fourth Round||$65.0||Brightpath Capital Partners, Skagen Group|
|Affirmed Networks Inc.||Provider of solutions for the mobile data space||Acton||Fourth Round||$51.0||Bessemer Venture Partners, Charles River Ventures, Deutsche Telekom|
|Extreme Reach Inc.||Video advertising solutions||Needham||Fourth Round||$50.0||Spectrum Equity Investors|
|Karyophram Therapeutics Inc.||Cancer treatment developer||Natick||Third Round||$48.2||Delphi Ventures, individual investors|
|Radius Health Inc.||Developer of treatments for osteoporosis||Cambridge||First Round||$43.0||BB Biotech Ventures, Brookside Capital LLC|
|Interactions Corp.||Virtual call-center solutions||Franklin||Later||$40.0||Cross Atlantic Capital Partners, North Hill Ventures, RED LLC|
|Tokai Pharmaceuticals||Developer of treatments for prostate cancer||Cambridge||Third Round||$35.5||Apple Tree Partners, individual investors, Novartis Venture Fund|
|Rapid Micro Biosystems Inc.||Detection technologies for microbial contamination||Bedford||Third Round||$32.6||Kleiner Perkins Caufield & Byers, Longitude Capital Management Co. LLC|
|Mevion Medical Systems Inc.||Radiation therapy treatment for cancer||Littleton||Seventh Round||$25.0||Caxton Associates, CHL Medical Partners, ProQuest Management LLC|
|BitSight Technologies Inc.||Provider of big data analytics for risk management||Cambridge||Second Round||$24.5||Commonwealth Capital Ventures, Flybridge Capital Partners|
*Equity financings include cash investments by professional venture capital firms, corporations, other private equity firms, and individuals into companies that have received at
least one round of venture funding.
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