Venture capital deal pace in Q3 remains slow
SAN FRANCISCO (Venture Capital Journal) - The third quarter was another down period for deal activity in the United States.
Venture capitalists invested $4.8 billion in 780 deals in the third quarter of 2010, according to the MoneyTree Report from the PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.
Investment activity in Q3 decreased 31 percent in terms of dollars, and it fell 19 percent in the number of deals, compared to the second quarter of 2010 when $6.9 billion was invested in 962 deals. The decrease in dollars invested was in large part due to the absence of large rounds in the cleantech sector, which drove last quarter's higher investment levels. Yet with few exceptions, investment in all industry sectors slowed in the past quarter.
However, as Michael Greeley, general partner of Flybridge Capital Partners, pointed out, U.S.-based VCs continued to go after first-time deals.
First-time financing (typically early stage startups that raise VC funding for the first time) in Q3 remained relatively steady with $1.2 billion going into 255 deals, compared to the previous quarter, when $1.2 billion was invested in 288 deals. This marks the fourth consecutive quarter when more than $1 billion was invested in companies for the first time.
It's uncertain whether the trend will continue, But here's a select list of VC-backed companies to raise early stage funding rounds in the last few days included the following:
FINANCIAL SERVICES
BlueCava
Irvine, CA
Amount/Round: $5 million/ Series A
Investors: Individual investors Mark Cuban, owner of the Dallas Mavericks, and Timothy Headington, founder of Headington Oil Co.
Details: Operates as a credit bureau and provides identification services for mobile devices. Cuban has joined the board of directors.
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DebtMarket
San Ramon, CA
Amount/Round: Undisclosed
Investors: Individual investors, including DebtMarket Founder and CEO Scott Walchek; James D. Robinson III, founder and partner of RRE Ventures; Tim Draper, managing director of Draper Fisher Jurvetson; James Jones, CEO of AccountNow; Patrick Cave, former Assistant Secretary at the U.S. Treasury Department and a principal at the Cypress Group; Damon Munchus, former Deputy Assistant Secretary at the U.S. Treasury Department and a principal at the Cypress Group; King Mueller, former Deputy Assistant Secretary at the U.S. Treasury Department and a principal at the Cypress Group; Tom Unterman, founding partner of Rustic Canyon Ventures; and Eric Xu, founder of Baidu and managing general partner of Yifang Ventures
Details: Operates an online marketplace for buying and selling loans.
INTERNET MARKETING
Clovr Media
Waltham, MA
Amount/Round: $1.5 million/seed stage
Investors: Kepha Partners and CommonAngels
Details: Provides credit card-linked offers for online advertisers. The company was founded by Thomas Burgess, founder and CEO of Third Screen Media. The company name Clovr stands for "Card Linked Offer with Virtual Redemption."
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Sharethrough
San Francisco, CA
Amount/Round: $5 million/Series A
Investors: North Bridge Venture Partners and Floodgate
Details: Provides social video advertising services. Cali Tran, a principal of North Bridge Venture Partners, has joined the board of directors.
MED TECH
NinePoint Medical
Cambridge, MA
Amount/Round: $33 million/Series A
Investors: Third Rock Ventures and Prospect Venture Partners
Details: Develops optical devices that can allow doctors to inspect potentially cancerous cells during biopsies. The company is the first medical devise manufacturer to raise seed funding from Third Rock, according to Mark Levin, co-founder and partner at Third Rock. Since it launched in 2007, Third Rock has primarily invested in drug developers.
MOBILE APPS
UberCab
San Francisco, CA
Amount/Round: $1.25 million/seed stage
Investors: First Round Capital (led), Founder Collective, Lowercase Capital and individual investors.
Details: Provides an on-demand car service that works via the iPhone and SMS. The company was founded by Stumbleupon co-founder Garrett Camp and entrepreneur-angel Travis Kalanick. Lowercase Capital is the investment vehicle for angel investor Chris Sacca.
PHARMACEUTICALS
ViroXis Corp
San Antonio, TX
Amount/Round: $2.5 million
Investors: Texas Emerging Technology Fund
Details: Develops anti-viral treatment for skin disorders based on Sandalwood oil. The investment was announced by Startech and the South Texas Regional Center of Innovation and Commercialization.
VIDEO TECH
Wham Inc.
Allen, TX
Amount/Round: $3 million/Series A
Investors: Palomar Ventures
Details: The startup says it provides video calling services.
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