N.E. VC Investment Sinks in 4th Quarter—No Surprise—And Lists of the Region’s Top Deals and Dealmakers

1/20/09

More ugly data on U.S. venture investment circulated over the weekend, so we at Xconomy thought we’d dig in and highlight some of the top deals and dealmakers in the region last quarter.

But first the big picture from Dow Jones VentureSource. The nationwide survey of venture deals found that New England had 79 venture deals valued at a total of $728.4 million in the fourth quarter of last year, down 31 percent from the $1.06 billion raised in 91 deals in the same quarter in 2007. The drop in New England venture investment was slightly worse than the 30-percent decline nationwide. There were 554 venture deals throughout the country totaling $5.5 billion in the fourth quarter of 2008, compared with 718 deals worth $7.9 billion the in same period the previous year.

The decline in the region’s total venture activity for the full year was less severe. The survey shows New England companies raised $3.4 billion in 328 venture financings during all of 2008, a 19-percent drop from the $4.2 billion pulled in from 377 deals the year before.

The slump in venture activity also extended to how much firms brought in for their investment funds, according to figures released this week by the National Venture Capital Association and Thomson Reuters. New England venture firms raised $3.4 billion in the fourth quarter of 2008, down a whopping 70 percent from $11.7 raised in the same quarter of 2007.

Now for more sunny news from Dow Jones VentureSource—here are the lists of the top five most active venture firms in New England and the region’s top five deals for the last three months of 2008:

The Region’s Five Most Active Venture Firms in the Fourth Quarter of 2008:

—North Bridge Venture Partners, of Waltham, MA and San Mateo, CA, did 10 deals.

—Flybridge Capital Partners, Boston, completed five deals.

—Massachusetts Technology Development Corporation (MTDC), of Boston, invested in four financings.

—Highland Capital Partners, which has an office in Lexington, MA, did four deals.

—Egan-Managed Capital, of Boston, completed four deals.

New England’s Five Biggest Venture Deals in the Fourth Quarter of 2008:

—Satori Pharmaceuticals, a Cambridge, MA-based developer of drugs to treat Alzheimer’s disease, raised $22 million in a first round of venture financing (Here’s Luke’s story on the large deal).

—Predictive Biosciences, a Lexington-based firm developing diagnostics to facilitate individualized cancer treatments, reeled in $21.75 million in a Series B round of financing. (Bob noted that the deal came after a dearth of life sciences financings.)

—Ze-gen, a Boston firm commercializing a technology to convert solid waste in gas for power plans, closed $20 million second round of financing. (I wrote that Ze-gen finished the deal with big help from a Middle Eastern conglomerate.)

—Alnara Pharmaceuticals broke out of stealth mode with a $20 million first round of financing to develop oral biotech drugs. (Luke covered the Boston-based firm’s deal and the great challenge of delivering biotech drugs orally.

Helium, an Andover, MA, firm that provides an online marketplace for writers, raised $17 million in a first round of financing. (A sign of the times, Wade wrote that the company actually cut workers at around the same time of the deal.)

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