Thursday, April 15, 2010
Southern California Investments On Uptick, Totals $686.5M For Q1
Southern California venture capital investments totaled $686.5M for the quarter, up from both Q4 of last year as well as the comparable Q1 quarter in 2009, according to the latest numbers from PricewaterhouseCoopers and the NVCA. According to the report, released today, Southern California investments totaled $686.5M in Q1, up from $588.033M tallied by the report in Q4 of 2009, and up significantly from the $320.2M received in the region in Q1 of 2009. Southern California's investment totals bucked the national trend, which found that there was a 9 percent drop in dollars to $4.7 billion in investments in 681 deals in the first quarter of 2010. Nationally, Q4 of 2009 brought in $5.2 billion in venture deals in 832 deals.
For Southern California, Orange County actually had the most dollars invested, with $239.6M invested across 18 deals, followed by Los Angeles, with $224.4M across 31 days. San Diego was not far behind, with $222.4M in 29 venture capital deals for Q1. For Orange County, the investments were significantly higher than the Q4 investments of $48M in the area, boosted significantly by $115.3M invested in electric auto maker Fisker Automotive. "We have seen a marked uptick in both the quality and quantity of investment opportunities in the last couple of quarters and expect the next few quarters to be good in terms of VC related news," said Marc Averitt, a venture capitalist at Okapi Venture Capital, which has an emphasis on Orange County startups, although the firm does invest elsewhere. Averitt explained that a combination of less money in early stage finance; more people starting companies; a good reputation in Southern California; and more mature tech transfer offices and processes within SoCal universities and institutes has helped in the investment uptick.
The energy and clean technology sector actually helped boost investments in Los Angeles, as well, with big deals for Torrance-based Amonix, which raised $64.4M in the quarter; Coda Automotive, with $25M invested; and eSolar, with $20M. Clean technology in Southern California represented $230.0M of the total invested in Q1. Other major areas of investment were Medical Devices and Equipment, with $131.46M in investments and Biotechnology, with $77.6M. Media and Entertainment was at $55.5M in investments, IT services--which includes many online advertising firms--was at $35.15M in investments.
The most active firms investing in Southern California, according to the Pwc/NVCA report, were GRP Partners, Domain Associates, and TPG Growth--all with 4 investments each--followed by Allegis Capital, Benchmark Capital, and Sanderling Ventures, all with three investments each. Interestingly enough, the most active local venture capital firms did not necessarily invest in Southern California, with Redpoint ventures (11 investments), GRP Partners (4 investments), Enterprise Partners (4 investments), and Rustic Canyon Partners (4 investments) ranked on the most active firms here. Mark Suster, a venture capitalist at GRP Partners, the most active venture capital firm on the list, explains that "We are seeing very high quality deals in terms of both early stage innovation, but also a lot of valuable assets that have been invested in over the past five or six years, which still represent great value." Suster, continuing, said that he'd be "surprised" if deals from his firm- if not in terms of count, but for sure dollars--didn't continue to keep pace the rest of the year.