Senior Vice President
Southwest Market Manager
City National Technology Group
Orange County saw a sharp fall in venture capital funding in the fourth quarter, continuing a recent trend of declining financing activity.
Just six deals were completed worth $114.2 million in the quarter, down from 12 deals worth $140.9 million in the summer quarter and a steep drop from 11 deals worth $245.3 million a year earlier, according to CB Insights.
O.C.’s slump contrasted with a surge in venture financing nationwide to $13.5 billion in the fourth quarter, up from $9.8 billion in the third quarter and $8 billion in the fourth quarter of 2013.
“O.C. venture financing has been in a slowdown for the last three or four years,” said Billy O’Grady, head of City National’s Southern California Technology Group. “I think they’re in a regrouping phase,” he said.
For all of 2014, venture funding in O.C. fell to $690 million from $719 million in 2013 and $900 million in 2012, CB Insights said.
There were just a handful of deals last quarter in O.C.’s traditional hotbed of health care.
The biggest health care deal was a $15 million Series C financing for OrthAlign of Aliso Viejo. The six-year-old company makes devices to help surgeons boost precision in knee and hip implant surgery.
Another health care firm, Sentrian of Aliso Viejo, attracted $12 million in Series A funding. The startup is testing a “remote patient intelligence” system that uses biosensors to monitor patients’ health. The goal is to detect failing health before it becomes serious enough to require hospitalization.
The single-biggest O.C. deal in the quarter was $60 million in Series C financing for Alteryx. The Irvine company calls itself “the leader in data blending and advanced analytics software.” Data blending means using multiple sources of data to find meaningful patterns in, say, consumer behavior toward a product or service.
EQUITY FINANCINGS FOR ORANGE COUNTY VENTURE-BACKED COMPANIES*
|4 Q 2014||3 Q 2014||2 Q 2014||1 Q 2014||4 Q 2013|
|Number of Financing Deals||6||12||9||15||11|
|Amount Invested ($MM)||$114.2||$140.9||$167.2||$226.5||$245.3|
TOP DEALS IN ORANGE COUNTY
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Alteryx||Data blending and analytics software provider||Irvine||Series C||$60.0||Insight Venture Partners, Sapphire Ventures, Toba Capital|
|Illuminate Education||Web-based products and services for education-related data||Irvine||Series A||$26.5||Insight Venture Partners|
|OrthAlign||Precision alignment technology for orthopedic surgeons||Aliso Viejo||Series C||$15.0||River Cities Capital Fund, Mutual Capital Partners Fund|
|Sentrian||“Remote patient intelligence” that detects patient deterioration remotely||Aliso Viejo||Series A||$12.0||TELUS Ventures, Reed Elsevier Ventures, Frost Data Capital|
|Bioniz||Developing a new class of therapeutics targeting cytokines and their receptors||Irvine||Seed VC - II||$0.7||Catalina Ventures|
|Telogis||SaaS-based platform for logistics for workforces In the field||Aliso Viejo||Unattributed VC||Undisclosed||GM Ventures|
|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, accounting or legal adviser.|