It’s a fine time to be a tech entrepreneur. Investors liked software, media and entertainment and medical device companies.
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Nationally, software companies raised $7.3 billion during the quarter, an all-time high in MoneyTree history, PricewaterhouseCoopers reported.
This market is hot, and appears to be staying hot.
One potential reason for venture capitalists’ largesse: fat wallets.
For example, alternative lodging marketplace Airbnb raised $1.5 billion for the quarter – the largest recorded deal of the quarter.
The number of companies that received investment also edged up to 75, from 72 in the first quarter, according to the MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. Adjusted for inflation – which the report does not do – that’s about $13 billion.
Two reports out this week showed a decline in the amount of venture capital invested in local firms in the second quarter compared with the same quarter past year.
The eyebrow-raising amounts will likely amplify chatter about another tech bubble, but VCs show no sign of slowing their investment pace, always in search of the next Facebook and Uber. “There is a lot of money still to change hands”.
Four of the seven Minnesota companies receiving venture capital in the second quarter are considered expansion-stage companies. “You can’t just wade in”. “That’s more than we have seen in a while in a quarter”. “And that doesn’t necessarily have to be the end of the world”.
The largest Triangle deal was Innocrin Pharmaceutical’s $28.1 million raise.
These early startups raised $256 million, up from a meager $42.1 million in the first quarter. The median pre-money valuation of later-stage rounds in the first half of this year was $310 million compared with $213.3 million for all of last year. More than $490 million was invested into Boston companies in this space during the second quarter of 2015-a notable jump from more than $218 million in the Q2 of 2014.
According to the authoritative MoneyTree report, six St. Louis businesses raised a total of $35.9 million between April and June. It won $7.3 billion in investment, a 30% increase from the first quarter. “These are not no-revenue start-up companies”.
Tampa’s AquaVenture Holdings led the way locally in the quarter with $30 million committed by several venture capital firms, including Advent Morro Equity Partners.
“Software companies are easier to get up and running and easier to scale in comparison to other industries that are a bit more capital intensive”, Ciccolella said. South San Francisco-based Denali Therapeutics-a neurodegeneration upstart backed by an ex-Genentech crew-came up with a huge $217 million round from Arch, Fidelity and Flagship.
More than half the state’s funding flowed to South Florida.
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Contact Heather Somerville at 510-208-6413.
