Big Wave of Q2 VC Funding Washes Ashore in San Diego with $222M

7/21/14Follow @bvbigelow

So how did San Diego fare as the biggest wave of venture capital funding in 13 years swept across the United States, sloshing capital into startups from Silicon Valley to New York, and from Seattle to Houston?

The answer is just OK.

Venture capital firms invested a total of $222.4 million in 26 deals in the San Diego area during the second quarter of 2014, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association, and Thomson Reuters. The amount of dollars invested in San Diego declined by 15 percent from the $261.4 million that VCs put into 26 startups during the previous quarter, according to MoneyTree data. But it was a 22 percent gain from the $182.2 million that VCs put into 20 deals during the year-ago quarter of 2013.

(San Diego’s list of second-quarter Top 10 Deals is listed below.)

As we reported last week, VCs invested almost $13 billion into 1,114 U.S. startups nationwide during the second quarter, marking the biggest quarterly investment total since $13.1 billion was invested in the first quarter of 2001.

But the big nationwide surge wasn’t apparent in the MoneyTree data for San Diego. In fact, venture investing in San Diego so far this year is more characteristic of 2012, when the average quarterly investment was $239 million, than of 2001, when the average was $395 million a quarter (without factoring for inflation).

The breakout of second-quarter MoneyTree data shows that two-thirds of the $222.4 million invested in San Diego went into life sciences companies like Otonomy, which raised $49 million, and Cidara Therapeutics, which got $32 million. VCs invested a total of $27 million in nine San Diego software companies, with $20 million of that going to Tealium, which provides Web-based technology to help big brand-name organizations manage their metadata tags.

So how does San Diego stack up in comparison with other U.S. regions during the same quarter?

More than half the nationwide total was invested in Silicon Valley, with $7.1 billion going into 365 deals. Other regions, in descending order of total capital invested, based on MoneyTree data:

2) New York metro area: $1.2 billion; 122 deals.

3) Boston metro: $1.08 billion; 101 deals.

4) Seattle metro: $359 million; 31 deals.

5) Washington, DC, metro: $247.3 million; 58 deals.

6) San Diego: $222 million; 26 deals.

7) Austin, TX: $168 million; 29 deals.

8) Colorado: $151 million; 20 deals (19 in Denver-Boulder).

Another survey of second-quarter venture activity released by Dow Jones VentureSource showed that VCs invested a total of $294 million in 17 deals in the San Diego area. (Different venture activity surveys use different sources, criteria, and methodology to count venture deals.)

According to MoneyTree data, the Top 10 deals in San Diego during the second quarter were:

Otonomy; San Diego, $49 million, Biotechnology.

Verdezyne; Carlsbad, $48 million, Biotechnology (Industrial Biotechnology).

Cidara Therapeutics; San Diego, $32 million, Biotechnology.

Sotera Wireless; San Diego, $20.7 million, Medical Devices & Equipment (Digital Health).

Tealium; San Diego, $20 million, Software.

On-Ramp Wireless; San Diego, $13.6 million, Networking Equipment.

Inception 1; San Diego, $5.5 million, Biotechnology.

Transaction Wireless; San Diego, $5.2 million, IT Services (Digital gift card).

Sente; Encinitas, CA,  $5 million, Consumer (Cosmetics).

Inception 5; San Diego, $5 million, Biotechnology.

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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