Massachusetts Startups Held Their Own in February—Upwards of $200 Million Invested in 26 Deals

3/15/10Follow @bbuderi

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the sector led the way among areas of investment in February, as it has done every month we have been tracking the numbers, with the exception of last month (the software sector ruled the roost in January, read on). All told, investors put $89.9 million into nine healthcare deals in February. Energy was a distant second, with three firms in that sector raising just under $40 million. Internet ($24.5million, five deals) was next in line. And the January leader, software—how far the mighty have fallen—came in fourth, with $21.6 million raised in three deals. It should be noted, however, that January’s great performance by the software sector was skewed by a staggering $120 million raised by IkaSystems, a developer of process automation and intelligence management software for the healthcare payer market.

Here are a few other highlights or interesting trends we spotted in the February data, along with the full list of equity financing deals for the month:

—I’m ready to proclaim with gusto that energy is back. The sector, white hot in 2008, seemed to enter a no-funding zone last year. But for the second month in a row, energy companies attracted upwards of $30 million in funding. The sector was led by Boston-based waste gasification company Ze-gen and energy storage company General Compression of Newton, MA, which took the fourth and fifth spots from the top, respectively, for the month.

—The Internet sector was second in deal numbers, with five. Leading the way was Currensee, a Boston-based social network for currency traders. It claimed $8 million for its Series B round that closed last month, although some of the money was raised last year.

—Early-stage deals continue to lead the way. The funding round couldn’t be identified for every deal, but of the 23 for which the round is known, 14 were either seed stage, Series A, or Series B (although I have to ask when Marathon Technologies, which reported a Series B-III round, will be ready to move up the alphabet to a Series C).

—Polaris Venture Partners was the most active investor of the month, taking part in three deals: 1366 Technologies, Veracode, and Allurent. It’s worth a shout out to our neighbors, 1366 and Allurent, both of which are a stone’s throw (in my ball-playing days, anyway) from Xconomy.

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Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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