Wednesday, December 27, 2006

Recap on DC Area VC Activity for 2006

Here is an article that gives a recap on the DC area's VC activity for 2006. Mid-Atlantic Bio is mentioned at the end.

Venture capital: Strong year for software, telecom

Katie Wilmeth, The Examiner
Dec 27, 2006 3:00 AM (6 hrs ago)
Current rank: # 1 of 13,170 articles
Washington, D.C. - Despite several high-profile biotechnology deals in 2006, software and telecommunications remained the dominant industries among venture capitalists looking to invest in the Washington region.

“We have a strong legacy sector in telecommunications and technology in this region,” said Julia Spicer, executive director of the Mid-Atlantic Venture Association. “That will continue to be opportunistically a great investment space, and we have lots of investors across the board who understand that space.”

Funding for local software companies was approaching the $200 million mark at the end of the third quarter with $192 million invested in 51 deals. While numbers aren’t out yet for the fourth quarter, those figures put the category on track to outpace 2005 investments. During the third quarter of 2005, investments had reached only about $140 million.

Telecom also had a strong year. With more than $270 million invested in 17 deals in the first three quarters of 2006, the industry sector jockeyed with software and biotechnology for the top spot among investors.

But while software and telecom quietly remained on top, it was the biotech industry that made headlines in 2006 with several multimillion dollar deals. Investments in local biotech companies surged ahead in the second quarter with $145 million in funding and 13 deals. Much of that money went to Rockville-based CoGenesys. The biotech firm received nearly $55 million in Series A financing in June, a number often unheard of in the software industry.

Biotechnology remains a growth area for the region, said Spicer, with few venture firms focused on the sector and more money needed to fund fewer companies.

“[Software] is more predictable in some ways,” said Bill Gust, managing general partner of Anthem Capital in a July interview. “It’s more predictable. You can sell the company or software to somebody else and recoup your investment. Whereas the life sciences … you’re talking about tremendous amounts of money needed to carry a company into commercialization.”

The opening of Janelia Farm — a bioscience research campus in Loudon County — and a successful venture capital fair sponsored by MAVA, as well as the Virginia Biotechnology Association and MdBio, also put the industry in the spotlight in 2006.

Top five venture capital deals of 2006:

» CURRENT Communications Group — $129,999,700 (Germantown)

» CoGenesys Inc. — $54,999,9000 (Rockville)

» MacroGenics Inc. — $45,000,000 (Rockville)

» SunRocket Inc. — $33,000,200 (Vienna)

» Kajeet Inc. — $27,000,000 (Bethesda)


No comments: