Venture Capital Investment Slips Over 40% From Last Week
CapitalHunter. com was able to verify that $309 million of venture capital was invested in 37 U. S.-based companies during the past week. The amount of venture capital invested this period decreased by 45% compared to last periods $564 million.
San Diego, CA (PRWEB) March 31, 2006
Venture capital investment, which rose sharply last week, declined almost as sharply this period, as companies barely registered $300 million, a week-over-week drop of nearly 45%. Unlike last week, where there were eleven companies that received an investment of over $20 million, only three companies qualified for such an honor this week. In fact, if it weren’t for the $75 million investment Salick Cardiovascular Centers received from Warburg Pincus, this period would have been the quietest week of funding since the Fourth of July last year. Of the 37 companies that received funding, ten of them received less than $2 million and thirty received less than $11 million. However, there is a potential silver lining to this story, as it suggests that some of the cash private equity firms have been piling up is starting to trickle down to (very) early stage companies. Magen Biosciences, a biotechnology company currently developing therapeutics to treat various skin disorders, received a $2.3 million Series A investment from ARCH Venture Partners, Venrock Associates and TVM Capital. Another company, Sonopia, a technology firm that is currently developing methods to segment mobile market traffic, raised $2.3 million in Series A funding from ComVentures and Sevin Rosen Funds and could receive more as the product development progresses (the $2.3 million in part of a larger $8.9 million round of funding) to completion. There were also some seed financings that took place, however most of these were either done by angel investors or government agencies. Whether this is part of a new trend or a funding anomaly is something that we will keep an eye on throughout the coming month ahead.
IPO activity, after languishing the past few weeks, picked up some steam as seven companies had newly minted shares to offer to the public this week. Of these seven companies, three of them are related to the financial services industry, the largest such bunch of companies in many months. The biggest draw, however, was for Tim Horton’s, a Canadian restaurant chain well known for its coffee and doughnut holes (called Timbits) that pulled in well over a half billion dollars. The seven companies are as follows:
Nextest Systems priced at $75.6 million and is a designer, developer, and seller of automated test equipment for the semiconductor industry.
North American Insurance Leaders priced at $100 million and is a blank check company organized to acquire the assets of an insurance business.
EFuture Information Technology priced at $9 million and is a provider of integrated software and services for China’s supply chain front market.
Tim Horton’s priced at $671.6 million and is a Canadian-based quick service restaurant chain.
Macro Bansud Bank priced at $197.8 million and is a provider of financial and banking services in Argentina.
Global Traffic Network priced at $19 million and is a provider of customized traffic and news reports to radio and television stations in Australia and Canada.
Clayton Holdings priced at $127.5 million and is a provider of outsourcing services, mortgage-related analytics and consulting services for buyers and sellers of mortgage and debt instruments.
Top VC Investments for the Week
Salick Cardiovascular Centers, a provider of cardiovascular outpatient facilities, raised $75 million in Series A funding from Warburg Pincus.
Ekos, a provider of ultrasound enhanced micro-catheters used to dissolve blood clots in the brain and legs, received $26 million in Series C funding from a consortium of investors, including Ascension Health Ventures, Oakwood Medical Investors, Trellis Health Ventures, CID Equity Capital, EGS Private Healthcare Investors, MedVenture Associates, Mitsui & Co. Venture Partners, Morgan Stanley Venture Partners and NGN Capital.
Proofpoint, a provider of anti-spam software and messaging security solutions to large enterprises, raised $20 million in Series E funding from Bridgescale Partners, Benchmark Capital, Investures Group, Meritech Capital Partners, Mohr Davidow Ventures and RRE Ventures.
Venture Funding Breakdown
California was the largest recipient of venture capital funding this week. Sixteen California companies raised $169.2 million in new equity financing, which accounted for 54% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into the aforementioned Salick Cardiovascular Centers.
The software sector raised the most venture capital this reporting period, with seventeen companies raising $123.1 million in venture financing, which accounted for 39% of the venture capital this period. The largest private venture financing in the software sector this period was placed into the earlier mentioned Proofpoint.
Start-ups raising their Series A round of financing represented the largest share of the funding pie, as a whopping 49% of all money invested this period went into such companies. The largest such financing was placed into, once again, Salick Cardiovascular Centers.
Summary
A total of 79 equity financings of private and public companies occurred during this reporting period. Each of the 79 equity financings are profiled in a weekly (in this case biweekly) report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.
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