While U.S. venture capital investment posted its worst quarter in almost three years, funding for Orange County companies surged in the second quarter of 2013, propelled by a handful of large deals.
Orange County companies raised $136 million in the second quarter, a 25% increase in capital investment from the first quarter and a 48% increase from the second quarter of 2012.
I am encouraged by this very positive trend. While it's too early to make longterm predictions about this market, I'm hopeful that this trend will continue.
There are some positive signs on the horizon nationally, with more venture capital firms closing funds in the second quarter. U.S. VCs raised 50 funds at a total of $6.8 billion in the second quarter of 2013, a 48% increase compared with the first quarter. Year to date, these funds were up 4% compared from the same six-month period in 2012.
If there are some positive exits for venture capital investors in Orange County – either through acquisitions or public offerings – it could spur additional growth in this area in the year ahead.
Orange County ranked 10th in deal flow in the quarter, surpassed by San Francisco, New York, Boston, Los Angeles, Seattle, the Potomac region, Austin, Chicago and San Diego.
A total of 11 Orange County companies received funding in the second quarter – unchanged from the first quarter and 18% higher than the nine rounds in the second quarter of 2012.
In the second quarter, however, the dollar value of the deals outpaced the first three months of the year, with big investments in healthcare and gaming.
The largest deals in the quarter were:
- Vertos Medical Inc., an Aliso Viejo based provider of spine-surgery medical devices, which raised $23 million in sixthround financing.
- Predixion Software Inc., a provider of predictive analytics software in San Juan Capistrano, which raised $20 million in fourth-round financing.
Gaming also continued to be a big draw for venture capital investors:
- Oculus VR Inc., an Irvine-based developer of a headset for 3-D gaming, was the third-largest deal in the quarter, raising $16 million in first-round financing
Nationwide, the numbers weren't as good. A total of 801 U.S. companies raised $7.2 billion in April, May and June, a 2% decrease in funding and a 0.5% dip in flow – the worst quarter, both in number of dollars and deals, since the third quarter of 2010.
The largest U.S. deal in the quarter was for Fab Inc., a New York-based shopping site for design aficionados, which raised $150 million in fourth-round funding from a number of investors, including Andreessen Horowitz and Atomico.
ORANGE COUNTY-BASED EQUITY FINANCINGS*
|2 Q 2013||1 Q 2013||4 Q 2012||3 Q 2012||2 Q 2012|
|Number of Financing Deals||11||11||13||7||9|
|Amount Invested ($M)||$135.99||$102.41||$249.18||$132.45||$69.86|
TOP 10 DEALS IN ORANGE COUNTY
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Vertos Medical||Medical device maker||Aliso Viejo||Sixth Round||$23.0||Aweida Venture Partners, CHL Medical Partners|
|Predixion Software Inc.||Predictive analytics software||San Juan Capistrano||Fourth Round||$20.0||Accenture, DFJ Frontier, EMC Corp.|
|Oculus VR Inc.||3-D gaming technology||Irvine||First Round||$16.0||Formation8 Partners|
|Unmanned Innovation Inc.||Development platforms for unmanned aircraft||Newport Beach||Fifth Round||$14.0||Andreessen Horowitz, First Round Capital LLC, Google Ventures|
|Numecent Holdings Ltd.||Cloud computing services||Irvine||Second Round||$13.6||Endeavour Ventures Ltd., individual investors|
|urturn (formerly Webdoc Inc.)||Provider of Web platform for self-expression||Irvine||First Round||$13.4||Balderton Capital Management LLP, Debiomanagement SA|
|Alteryx Inc.||Strategic analytics software||Irvine||Later Round||$12.0||SAP Ventures, Toba Capital|
|Zadara Storage||Virtual private storage arrays||Irvine||Second Round||$7.0||Genesis Capital Advisors Inc., Platinum Management|
*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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