Bay State Startup Funding Booms to $242.5M in January; Healthcare Firms Lead the Way

2/15/11Follow @xconomy

Funding dollars for Massachusetts tech and life sciences startups surged by more than 25 percent from December to January, with 32 startups bringing in $242.5 million in equity-based funding, according to data supplied by our partner CB Insights’ FundingFlash, a daily roundup of companies receiving venture capital, angel investment, and growth equity funding.

The healthcare sector helped drive the big New Year’s jump, raising more than triple the amount of money in January that it did in December. The massive increase helped healthcare regain its crown as the top sector for dollars raised, at $146.5 million across 13 deals, accounting for more than 60 percent of the financing pie for January. (By contrast, in December, the sector accounted for just under a quarter of the $192.3 million raised by startups.)

The top deal went to Lexington, MA-based RainDance Technologies, a maker of genomic research tools. The company pulled in $37.5 million in a Series D round, co-led by new investor Quaker BioVentures and existing investor Mohr Davidow Ventures. Not far behind it was Cambridge, MA-based Genocea Biosciences, a vaccine developer that spun out of Harvard, which raised $35 million in Series B money. Those two deals alone dwarfed the healthcare fundraising total for December.

Qteros, a Marlborough, MA-based developer of technology to convert plant waste and other non-food items into ethanol, helped the energy sector grab the second-place spot (with total funding for the sector at $24.4 million). Qteros raised $22 million in the first tranche of its Series C financing last month. The energy and utilities sector was still a distant second place in January, though; healthcare had it beat by more than $120 million in dollars raised for the month. But like healthcare, the energy sector did see a jump from its December financing numbers, when it pulled in only $6.1 million in two deals.

A few other sector trends include:

—Investments in traditional software companies slimmed down, to $9 million across two deals in January, from $26.4 million raised in three financings in December.

—The mobile sector saw some bigger deals last month, like a $15 million Series C round for Cambridge-based local gaming startup SCVNGR. As a whole, the sector brought in $20 million in two deals last month, compared to $16.8 million raised in six financings in December.

—Financing for Internet companies shrank by more than a factor of two in January, from $45.1 million to $20.8 million. The Internet sector remained in third place overall for dollars raised, though.

Check out the full list below for January’s equity-based startup financings in Massachusetts:

Bay State startups also collected another $5.2 million in three debt-based funding rounds. Check out those details below.

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