Orange County saw a drop in venture capital investments in the fourth quarter, mirroring declines in Los Angeles and the Bay Area.
But O.C. still posted an increase in total funding for the year, boosted by venture investors’ interest in Oculus VR Inc., a hot name in virtual-reality technology.
A total of just eight O.C. companies received venture financing last quarter, down from 13 in the third quarter and 13 as well in the fourth quarter of 2012.
The dollar amount invested via venture deals fell to $161.2 million last quarter, versus $190.6 million in the third quarter and $249.2 million a year earlier.
For the year, however, O.C firms took in $679.5 million across 44 deals, compared with $598.7 million across 45 deals in 2012.
O.C.’s total venture funding of $161 million last quarter ranked it ahead of the San Diego metro area, which took in about $100 million, and on par with the Dallas-Ft. Worth area.
Unlike in L.A. County and the Bay Area, where Internet-related firms continued to dominate the list of start-ups attracting venture capital in the fourth quarter, the relative handful of deals in O.C. were spread across consumer services, software, medical devices and financial services.
The quarter’s biggest O.C. transactions:
– Irvine-based Oculus VR took in $74.3 million in second-round financing from a group led by venture giant Andreesen Horowitz. The money is expected to help the start-up reach its goal of bringing its cutting-edge virtual reality headset – the Oculus Rift – to market later this year or in 2015.
Oculus has generated extraordinary excitement in the gaming community ever since it quickly raised $2.4 million via crowdfunding site Kickstarter in 2012. Its demonstration of the latest Rift headset prototype at the Consumer Electronics Show in Las Vegas this January was met with gushing reviews.
"Putting on the Oculus Rift helmet didn’t just take me into a new game experience; it took me into an entirely new world," wrote Mashable’s Christina Warren.
– AqueSys Inc., based in Aliso Viejo, raised $43.6 million for further development of its proposed new treatment of glaucoma: a tiny, permanent gel stent that is implanted in the eye to drain away excess fluid. The 7-year-old firm is currently in patient trials with the stent as it seeks U.S. Food and Drug Administration approval.
The fifth-round funding was led by a “new, undisclosed investor,” AqueSys said, with participation from previous investors Accuitive Medical Ventures, Carlyle Group, Longitude Capital, Rho Ventures, and SV Life Sciences.
– Venture investors led by Sageview Capital pumped $38 million in third-round funding into United Capital Financial Partners Inc., the Newport Beach parent of wealth advisory firm United Capital Financial Advisers.
Founded in 2005, United Capital is building a national network of wealth advisory offices by consolidating small, independent financial advisors under its brand. The fast-growing firm says it now has 47 offices and $9 billion in client assets under management, and also advises on $9 billion in pension fund assets.
EQUITY FINANCINGS FOR ORANGE COUNTY VENTURE-BACKED COMPANIES*
|4 Q 2013||3 Q 2013||2 Q 2013||1 Q 2012||4 Q 2012|
|Number of Financing Deals||8||13||12||11||13|
|Amount Invested ($M)||$161.2||$190.6||$194.0||$133.7||$249.2|
TOP DEALS IN ORANGE COUNTY
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Oculus VR Inc.||Virtual-reality technology||Irvine||Second round||$74.3||Andreesen Horowitz, Formation8 Partners LLC, Matrix Management Corp., Spark Capital|
|AqueSys Inc.||Implantable gel stents for treating glaucoma||Aliso Viejo||Fifth Round||$43.6||Accuitive Medical Ventures, Carlyle Group, Longitude Capital Management Co. LLC, Rho Ventures, SV Life Sciences Advisers LLC|
|United Capital Financial Partners Inc.||Wealth management services||Newport Beach||Third Round||$38.0||Bessemer Venture Partners, Grail Partners LLC, Sageview Capital LP|
|TextPower Inc.||Text-messaging software for businesses||San Juan Capistrano||First Round||$0.5||Individual investors, Tech Coast Angels Inc.|
*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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