San Diego VC Activity at Ebb Tide in 2011 and Top 10 Local Deals

1/20/12Follow @bvbigelow

Money pumped into San Diego’s regional economy by venture capital firms hit an eight-year low in 2011, with a total of $829 million invested in 104 startups throughout the year, according to the MoneyTree VC survey being released today. The 2011 deal count was the lowest seen in San Diego since 1997.

The 2011 numbers represent a 5 percent decline in dollars and a 17 percent decline in deals in comparison with the previous year, when VCs put a total of $871.7 million in 126 startups, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association (NVCA) and Thomson Reuters.

The decline in San Diego’s venture activity ran counter to the nationwide trend in 2011, in which $28.5 billion was invested in 3,673 deals—and ranks as the third-highest total in the past decade. The U.S. numbers represent a 22 percent increase over the $23.6 billion in 2010 VC funding and a 4 percent rise over the previous year’s deal count, according to the MoneyTree analysis.

The overall U.S. trend depicted in the MoneyTree Report generally agrees with the rise in venture activity nationwide that CB Insights charted last week in its 2011 findings. CB Insights, the New York financial analysis firm, said the $30.6 billion VCs invested in 3,051 deals throughout 2011 was a 10-year high in terms of both dollars and deals. (The two sets of numbers don’t line up exactly because the firms use different methods to collect their venture data, and count dollars and deals in different ways.)

In the fourth quarter of 2011, the MoneyTree Report shows that venture capitalists invested $269 million in 23 deals in the San Diego area, with life sciences startups in diagnostics, drugs, and devices accounting for roughly two-thirds of the transactions. It represented a nearly 20 percent gain in dollars, but a 28 percent slide in deals compared with the same quarter last year, when $225 million was invested in 32 companies throughout the San Diego area.

Quarterly venture activity in San Diego tends to be erratic, however. Over the past decade, the MoneyTree Report shows that the $419.5 million was invested in San Diego during the fourth quarter of 2007 fell to $185.1 million in the same quarter a year later—and swung back to $341 million in 2009.

Here’s our list of San Diego’s top 10 venture deals during the fourth quarter, based on the MoneyTree data:

Razer USA   $50 million

AnaptysBio   $33.9M

Elevation Pharmaceuticals   $30M

Rempex Pharmaceuticals   $25M

Legend 3D   $19M

Anaphore   $15M

SG Biofuels   $15M

BeneChill    $14M

CoDa Therapeutics   $14M

Ophthonix   $14M

The MoneyTree list of venture deals did not include the $85 million that San Diego-based DriveCam raised in November. It ranks as the biggest deal in San Diego during the last three months of 2011, and it’s unclear why it wasn’t included. DriveCam described it at the time as a private equity investment.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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