Bay State Startups Bring in $192M in December, Industrial Companies Squeeze Healthcare Sector Out of the Top Fundraising Spot

1/25/11Follow @xconomy

[Corrected 1/25/11, 12:40 pm. See below.]Good news and bad news for the state’s startups when it comes to dollars raised last month. Tech and life sciences firms overall collected a bigger chunk of change than the month before, but the healthcare sector, which typically leads the pack, yielded the top spot to the industrial sector. In total, the state’s tech and life sciences firms raised $192.3 million across 29 equity-based deals, according to our data partner CB Insights’ FundingFlash, a daily roundup of companies receiving venture capital, angel investment and growth equity funding. The December startup funding swelled by about 10 percent from November’s total, when Massachusetts startups collected $174.7 million across 37 deals.

Of that December pot, four healthcare companies took in $47.8 million in funding. It may not sound like anything to sneeze at, but those numbers pushed the healthcare sector (which includes biotech, med devices, and wellness companies) out of the lead it had been enjoying in the majority of 2010′s monthly deals lists. And it’s a huge drop from November, when life sciences companies brought in $74.1 million in 10 deals.

Companies in the industrial technology space edged ahead of healthcare startups in December by just $500,000, raising $48.3 million across four deals. And the Internet sector followed closely at healthcare’s heels, with $45.1 million raised across eight deals. So that means healthcare deals accounted for just one quarter of the investor dollars that Massachusetts startups raised last month, when much of last year they had been enjoying a share of at least about 40 percent.

The sector results for December followed much of the same patterns as the overall VC data for fourth quarter of 2010, much of which came out last week. As Xconomist Michael Greeley discussed yesterday, the industrial sector soared while the biotech and med devices space faltered last quarter, when it came to venture dollars raised.

Helping the industrial sector pull ahead was Cambridge, MA-based Rive Technology, which raised $25 million in a Series C financing last month that was the top deal for the month. The company, whose technology comes from MIT, is adapting catalysts used in chemical reactions performed on long-chain hydrocarbon molecules to help oil refiners pump more useable fuel out of each barrel of crude oil. The technology could also have implications in making other chemicals and biofuels more efficient.

As far as other big December deals go, Cambridge-based car-sharing service Zipcar took the runner-up deals spot with a $21 million Series G round. Semprus BioSciences, a medical device firm also operating out of Cambridge, came in third with an $18 million Series B deal.

In more sector news, Bay State mobile and telecommunications companies saw a sizeable boost in the cash they raised in December, compared to the rest of the fourth quarter. They raised $16.8 million in six equity deals last month, led by a $5.5 million in Series B money for Fluent Mobile. The Boston mobile marketing firm offers an iPhone news-aggregating app.

Read below for the full list of December equity deals.

Bay State startups also raised a whopping $83.4 million in nine non-equity deals. The big pot can be attributed to Boston, MA-based First Wind, which attracted a $76 million loan that it says will go to building its 40 megawatt Sheffield wind energy project in Vermont. Check out the chart below for details on the other debt- and options-based financings in December. [An earlier version of this paragraph mistakenly said that First Wind was based in Newton, MA. The company relocated to Boston last year. We regret the error.]

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