Startup Investing in Massachusetts Shrinks to $131M in July, Big Drop From June Surge

8/23/10Follow @xconomy

It looks like the lazy days of summer are in full swing. While equity financing deals for Massachusetts startups surged in June to hit a total of $307 million, investors took a bit of a break in July.

Last month, Bay State tech and life sciences startups raised less than half their June sum, $131.4 million brought in by 26 equity-based financings. That number was also far below the roughly $200 million that startups had been raising in most of the months before June, based on data provided by private company intelligence platform CB Insights.

The massive June startup investment pot was led by a $60 million deal for lithium-ion battery maker Boston-Power (the company added another $6.4 million to its financing last month). By comparison, July’s biggest deal was less than half that, a $24 million Series A round for Euthymics Bioscience. Last month, Luke wrote about how the Cambridge, MA-based startup is developing a treatment for depression that it says lacks the side effects of existing medications on the market.

The runner-up July deal went to another biotech, Metamark Genetics, which is developing diagnostics technology to track genetic markers as indicators of tumor progression. The company, which started out in Florida but is making a move to Cambridge, raised $22 million in a Series B financing.

In July, healthcare deals kept up their typical pattern of accounting for nearly half of the month’s sum of investments in startups. But even as the top sector, the total investment in July healthcare startups was nearly $100 million less than the sum raised by healthcare startups in June.

JulyEquityPieChart

A few interesting Internet startups nabbed some of the top deals in July. BuyWithMe grabbed a $16 million Series B investment led by Bain Capital Ventures. The Boston company is in the social buying space occupied by companies like Groupon, LivingSocial, and DealPop. Electronics trading and selling service Gazelle was another Internet company that attracted funding last month. The Boston startup raised $12 million in Series C money to help meet the demand from its growing customer base, develop partnerships with retailers, and enhance its pricing technology that determines how much a seller can get for used electronics.

Overall, Internet applications especially outshone more traditional software companies when it came to raising money in July. The Internet sector pulled in nearly $37 million dollars in seven deals. But there was only one non-Internet software deal in July, worth a mere $100,000. Traditional software investments seemed to be slowing down in the past few months, but July’s dealmaking was by far the most stagnant we had seen yet.

It’s hard to see why the drastic drop in startup investing occurred over just one month, so we’ll have to wait till next month to get the full picture of startup financings this summer in the Bay State. In the meantime, check out the full list below of equity deals for Massachusetts startups in July.

JulyEquityDealsTable

There were also another seven non-equity deals last month, which brought in a total of $14.25 million. See below for the details.

JulyNonEquityDeals

By posting a comment, you agree to our terms and conditions.