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Massachusetts Healthcare, Internet Companies Lead Pack in VC Chase

Xconomy Boston — 

The Massachusetts tech and life sciences community might have reason to boast, following a second-straight quarter during which companies in the state raised more than $1.3 billion from venture investors. The amount was good enough to make the Commonwealth the second-highest ranking state, beating out New York for that honor.

Companies in the Bay State raised a total of $1.37 billion in 93 deals during the first quarter of 2015, according to a report released Tuesday by CB Insights, a New York-based company that tracks venture capital investments.

Both numbers are actually down from the prior quarter, when companies raised $1.56 billion in 94 deals.

Still, the quarter gives Massachusetts bragging rights of a sort, as not only did it best a rival, but it trailed only California, which really is in a league of its own.

Other trends highlighted in the report:

A unicorn leads the way. The biggest deal belonged to SimpliVity, which raised a $175 million Series D round. That was large enough to give the Westborough, MA-based IT company a valuation of more than $1 billion. SimpliVity was one of seven tech companies across the country to join the unicorn club.

Healthcare and Internet companies dominate. Healthcare companies, which include biotech, pharmaceuticals, and medical devices, raised $493 million in 26 deals. Internet companies raised $367 million in 29 deals. CB Insights included cloud-based business, customer relationship management, adtech, and edtech in the Internet total, but not companies that specialize in mobile.

Startups show strength. While a few big deals got headlines, more than half of the deals involved early stage companies. Seed rounds made up 25 percent of the financings (23 deals), and Series A rounds accounted for 29 percent (27 deals). As you’d expect, when the amount of cash invested is taken into account, the numbers change, with 38 percent of the dollars, or about $520 million, invested in Series D or E rounds. Early stage rounds totaled $329 million.

Cambridge holds its own. While most of the deals went to companies in Boston, companies in Cambridge actually raised more dollars. They received $425 million in 27 deals, while Boston companies raised $347 million in 33 deals. Other Massachusetts cities lagged far behind. Cambridge also was the top city in the nation when it came to healthcare deals, with 11 deals raising $290 million.