Flying Under the Radar in February: Nine New England Startup Deals Under $1 Million

3/25/10Follow @xconomy

When it came to raking in venture dollars, things slowed down in Massachusetts in the month of February. Maybe it was the shorter calendar month, the typically frigid and dreary weather, or the fact New Englanders are just antsy for spring. In February Bay State startups pulled in $203 million across 26 financings in the $1 million-plus range, down from the sizeable $355.2 million raised in 28 deals in the first month of 2010.

New England’s under-$1 million deals—which like the larger deals we track with the help of data from our partner, CB Insights, a New York-based private company intelligence platform—chugged along at about the same pace in February as in January. In February, the region saw nine of these “under-the-radar” financings, each worth from $125,0000 to $850,000, with funding based in equity, debt, and other types of securities. January saw 10 sub-$1 million deals (though to confuse matters we included a couple of additional, $1 million financings on the month’s list).

February’s list shows that equity-based funding is still outweighing debt deals in the under-the-radar transactions. Five of the financings were based in equity, three were debt-related, and one involved a security to be acquired through the exercise of options and warrants. Investors went after a diverse array of companies, too. The February under-the-radar pack included startups working on hybrid technology, medical devices, health IT, industrial products, the semantic Web, audio transcription software, and e-commerce.

Companies based in Massachusetts took in all but one of the deals on the list; the exception being the $150,000 in equity-based funding that went to Norwalk, CT’s HealthPrize Technologies, another company crafting technology for reminding patients to take their meds. (Ryan wrote about this trend in a piece last week).

The biggest deal to make the February under-the-radar list was $850,000 for XL Hybrids, in a deal that included a promissory note convertible into equity and security to be acquired through the exercise of options or warrants, according to a regulatory filing. We covered the news when it first broke for the Somerville, MA-based startup, which helps organizations maintain hybrid vehicle fleets.

We’ve typically seen Web, software, and energy startups on past lists of smaller deals, but the life sciences industry made a splash in the smaller pool last month, thanks to deals for HealthPrize, as well as laparoscopic instrument maker Cambridge Endoscopic Devices (which actually operates out of Framingham, MA) and Marlborough, MA-based Spectra Analysis, a supplier of molecular spectroscopy systems that caught our eye when it received loans last year from a Massachusetts initiative for investing in the life sciences industry.

Another February under-the-radar deal, a debt-based transaction worth $501,994, went to a company we’ve seen before, Dedham, MA’s Metatomix. Wade previously profiled how the company’s semantic Web technology, which tags raw data with detailed descriptions, or metadata, helps law enforcement electronically monitor the records of past offenders.

And personally, I’m excited about another Web startup on the list: Cambridge’s thredUP, an online marketplace for exchanging used clothing, which pulled in $220,000 in equity-based funding last month.

Read below for the list of deals and company descriptions.

XL Hybrids Somerville,  MA A maker of hybrid systems for commercial vehicle fleets Security To Be Acquired $850,000
Cambridge Endoscopic Devices Framingham, MA A maker of handheld laparoscopic instruments Debt $734,000
Metal Oxygen Separation Technologies Natick,          MA A developer of technologies for converting metal oxides to high-purity metals and pure oxygen gas, for lowering industrial emissions and energy use Equity $645,200
Metatomix Dedham,      MA A provider of semantic integration software for enterprises Debt $501,994
Tap ‘n Tap Boston,         MA A designer of Web platforms for touch-screen home Internet devices Equity $500,000
3Play Media Cambridge,  MA A developer of audio transcription and captioning software Equity $450,000
thredUP Cambridge,  MA An online used clothing exchange Equity $220,000
HealthPrize Technologies Norwalk,       CT A maker of a system that incites patients to take their prescriptions, using financial incentives Equity $150,000
Spectra Analysis Marlborough, MA A supplier of molecular spectroscopy systems Debt $125,000

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