San Diego’s Q1 Venture Activity Surges on One Mega Deal

4/20/12Follow @bvbigelow

Boosted by a $144-million “mega deal” that Sappire Energy disclosed a few weeks ago, VC investments in San Diego climbed to a four-year high during the first quarter of 2012, according to a pair of VC surveys being released today.

San Diego’s bouyant trend, however, ran counter to a significant downward trend in overall VC funding throughout the United States, according to the surveys. We saw a similar nationwide decline in dollars invested during the first quarter in the venture capital activity report released earlier this week by CB Insights, the New York financial data services firm. (CB Insights does not break out its data by region, however.)

In the MoneyTree Report, VC investors provided almost $357.1 million in 22 deals throughout San Diego County. Almost half of the capital—$175 million—went into 12 life sciences deals here. Total funding amounted to the biggest slug of venture dollars for San Diego companies since the second quarter of 2008, when VCs invested $362.1 million in 39 deals, according to the MoneyTree survey, which is prepared by PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data from Thomson Reuters.

The numbers vary in the first-quarter data from Dow Jones VentureSource, but a similar surge of venture financing is apparent in the first-quarter data for San Diego. The financial services arm says VCs invested $467.25 million in 21 deals throughout San Diego County. It’s the most capital invested in this area that Dow Jones has counted in more than four years.

The national trend is a different story, however.

The MoneyTree Report found that VCs invested $5.8 billion in 758 deals in the first quarter, which represented a 14 percent drop in terms of dollars and a 5.4 percent decline in the number of deals compared to first quarter of 2011 when $6.7 billion was invested in 801 deals.

In a statement today, NVCA President Mark Heesen says, “The overall decline in investment in the first quarter underlies several shifts occurring in the venture space. The industry continues to contract and consolidate which is beginning to manifest itself in fewer dollars being invested in fewer deals.”

Dow Jones VentureSource said companies based throughout the United States raised $6.3 billion through 717 venture capital deals during the first quarter of 2012. That’s an 18 percent decline in capital and a 9 percent decline in deals from the same period last year.

Based on data in the MoneyTree report, San Diego’s 10 biggest first-quarter VC deals were:

Sapphire Energy, $140 million

Celladon, $42.2 million

Aragon Pharmaceuticals, $37.7 million

Applied Proteomics, $22.5 million

Allylix, $18.2 million

SkinMedica, $16.7 million

HemaQuest Pharmaceuticals, $13 million

Genalyte, $11.8 million

PhotoThera, $11.24 million

MOGL, $10 million

Based on data from Dow Jones VentureSource, the top San Diego deals were:

Sapphire Energy, $144 million

Celladon, $43 million

Aragon Pharmaceuticals, $42 million

Luxtera, $21.7 million

Allylix, $18.2 million

Genalyte, $11.8 million

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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