Massachusetts Venture Funding Slimmed Down to $194 Million in March, But Healthcare Investing Swelled

4/13/10Follow @xconomy

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represent an encouraging constant: the funding total for Internet startups was nearly identical to the $24.5 million raised across five deals in the sector in February. March’s biggest Internet deal, at $11 million, went to DataXu, a Boston startup whose bidding-oriented system helps online advertisers decide which purchases will best translate to conversions and click-throughs.

We’ll have to wait and see if our list of smaller, “under-the-radar” deals worth less than $1 million make up for the dropoff in venture funding in March. In the meantime, here are a few other observations from the rain-soaked month:

—Energy investing fell off the grid last month, as not one energy startup crossed our funding list. The sector ranked second in February with $39.8 million, the peak of what looked like was its comeback, and we boldly declared that investing in the industry was on the up. That’ll teach us to be so confident.

—Investing in mobile companies slowed from its already low rates, with not a single mobile deal last month. I was surprised, considering the state dubbed March as Mobile Madness Month (a great backdrop for Xconomy’s Mobile Madness Forum). Maybe it won’t be until this month that we see the fruits of that buzz. The sector only had one deal in January, worth $1.2 million, and another one in February, worth $1.3 million.

—Software was another area that took a tumble in March. The industry pulled in a grand total of $10.1 million, in one deal for Akorri Networks, a Littleton, MA-based maker of IT infrastructure management software. That’s less than half the $21.6 million that three software startups raked in during February.

–The one bright spot (aside from the surge in healthcare funding) was the fresh flow of cash for startups in the computer hardware and services space. The sector grabbed only $1.4 million in one deal in February, but boasted more than 10 times that last month. Twin $8 million deals for Framingham, MA-based CorrelSense and Woburn, MA’s SensAble Technologies brought the funding total for the industry to $16 million in March, putting it in third place. SensAble makes 3D and haptic systems for purposes from product design to dental modeling, and CorrelSense develops IT systems for helping businesses monitor transactions and improve the performance of large enterprise applications.

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