The Boston area helped drive a boom in U.S. venture capital investment in the second quarter, as funding for area companies topped $1 billion.

In a twist, the majority of Boston’s biggest VC deals in the quarter were businesses other than health care – long the region’s mainstay.

The single largest deal was a $57-million Series A funding package for SimpliSafe, a Cambridge, Mass.-based company that aims to disrupt the home-security industry. Its home-alarm systems use cellular connections instead of land lines, with monitoring costs well below its rivals.

“I’m seeing a lot of very interesting companies in Boston, both on the consumer side as well as the enterprise side,” said Bill Sweeney, East Coast regional director for City National’s Technology Group.

Overall, Boston-area companies took in $1.03 billion in VC money last quarter, up 20% from $859 million in the year-earlier period. A total of 100 companies were funded, up 43% from a year earlier, according to data firm CB Insights.

Despite this strong showing, Boston slipped to third in total funding last quarter as New York City edged into second place, with $1.12 billion in investment. Silicon Valley remained No. 1 by far, at nearly $8 billion.

Among Boston’s biggest VC deals last quarter, Acquia received $50 million in Series F funding from a group led by New Enterprise Associates. The Burlington, Mass., company, launched in 2007, develops website management software using Drupal open-source technology.

No. 6 on Boston’s funding list is Ambri, a Cambridge-based developer of liquid-metal battery technology, which got $35 million in Series C funding from a group that included Bill Gates. Ambri’s batteries are intended for electricity storage that could make alternative energy sources such as wind power more viable.

Although health care didn’t dominate the top-10 list of Boston VC deals in the quarter, the industry still was well represented.

Waltham, Mass.-based Proteon Therapeutics took in $45 million in Series D funding. The company is working on drugs to treat kidney and vascular diseases.

Another Waltham company, 10-year-old Chrono Therapeutics, got a $32 million Series A infusion to further develop its stop smoking bracelet, a nicotine-injection system designed to wean smokers from the habit.

“The health care sector will remain a large opportunity for VC investors,” Sweeney said. “Health care and biotech in Boston are fueled by a very deep ecosystem,” he said. “That ecosystem is made up of some of the best universities, talented and experienced entrepreneurs, and large pharma companies that collaborate with startups, universities and life-science investors.”

EQUITY FINANCINGS FOR BOSTON AREA VENTURE-BACKED COMPANIES*

  2 Q 2014 1 Q 2014 4 Q 2013 3 Q 2013 2 Q 2013
Number of Financing Deals 100 88 93 80 70
Amount Invested ($MM) $1031.5 $898.9 $972.9 $608.8 $858.7
 

TOP 10 DEALS IN BOSTON

COMPANY NAME DESCRIPTION CITY ROUND TYPE RAISED ($MM) INVESTORS
SimpliSafe Home security systems Cambridge Series A $57 Sequoia Capital
Acquia Open source social publishing system, Drupal Burlington Series F $50 New Enterprise Associates, North Bridge Venture Partners, Sigma Partners, Split Rock Partners, Investor Growth Capital, Tenaya Capital
Proteon Therapeutics Biopharmaceutical company developing a human recombinant protein Waltham Series D $45 MPM Capital, Bessemer Venture Partners, InterSouth Partners, Prism VentureWorks, Skyline Ventures, TVM Capital, Devon Park Bioventures, Deerfield Management, Vectis Healthcare & Life Sciences Fund, Abingworth, Pharmstandard International
SilverRail Technologies Develops technology for railways and travel distributors to easily connect Woburn Series C $40 Canaan Partners, Sutter Hill Ventures, Brook Venture Partners, Mithril Capital Management
Epirus Biopharmaceuticals A global biosimilar enterprise to improve patient access to important medicines Boston Series B $36 5AM Ventures, Montreux Equity Partners, TPG Biotech, Adage Capital Management, Mousse Partners, Monashee Capital, Livzon Mabpharm, Greenwoods Investment, Gibralt US
Ambri Developing an electricity storage solution centered around the liquid metal battery Cambridge Series C $35 Khosla Ventures, Total, Bill Gates, KLP Enterprises, Building Insurance Bern
Invaluable Online live-auction marketplace Allston Series D $33.8 Insight Venture Partners, Commonwealth Capital Ventures, Ascent Venture Partners
Chrono Therapeutics Patient optimized, drug-delivery platform Waltham Series A $32 Canaan Partners, Fountain Healthcare Partners, 5AM Ventures, Mayo Clinic, GE Ventures
Dimension Therapeutics Gene therapy platform development Cambridge Series B $30 OrbiMed Advisors, Fidelity Biosciences
NetBrain Technologies Map-driven network automation software development Burlington Growth Equity $30 Summit Partners
 

 

*Quarterly tallies consist of equity rounds completed in the quarter and in which a venture capital or corporate venture firm participated in the round.

The content of Venture Capital Report is compiled from data and sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Opinions expressed are those of the authors or the interviewees and are not necessarily the opinions of City National Bank, member FDIC. This publication is intended to be a source of general information regarding subject matters of interest to our clients. The effectiveness of the advice or suggestions presented, if any, will depend on the reader's situation and are for the reader to determine. If investments are discussed, the discussion should not be considered or relied upon as specific investment advice directed to the reader's specific investment objectives, nor should any discussion of specific securities be taken as a solicitation or recommendation for any reader to buy or sell such securities. City National Bank (and its clients or associated persons) may at times have positions in securities and investments discussed from time to time in this publication and may make additional purchases or sales inconsistent with the discussion. City National Bank, as a matter of policy, does not give tax, accounting, regulatory or legal advice. Rules and regulations in the areas of law, tax and accounting are subject to change and open to varying interpretations. The reader is encouraged to consult his or her own tax and legal adviser.

 

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