Venture Investors Spread Holiday Cheer to Mass. Startups in December: Companies Wrap Up $224 Million in Funding

Santa was good to the Massachusetts high-tech economy in December. Very good. Roughly $224 million poured into the state’s startups in 36 equity deals, representing 20 percent more money and more than 50 percent more deals than Bay State startup companies saw in November.

And November venture funding-22 deals worth $186 million-was nothing to scoff at. It’s now the fourth-highest dollars and deals totals since Xconomy started tracking monthly venture figures in June, with data supplied by our New York-based partner ChubbyBrain, an information services company with tools for investors, startups, and hopeful entrepreneurs.

The money Massachusetts startups raked in during December-the second-highest dollar total and highest number of deals tracked by Xconomy so far-suggests that the growth regained in November after a brief fall slump is continuing. Venture funding in October had shrunk to $169 million across 19 deals, compared to September’s $228 million in 25 deals, currently the best month in dollar terms to date.

Venture deals were a bit more egalitarian in December than they were in the previous month. The top five November deals were worth $21 million or more, the highest one ringing in at $31.3 million. The sixth-biggest round, however, dropped sharply to $6.7 million. December deals didn’t display the same staggering gaps in dollar values, though. The biggest disparity was the $4 million difference between No. 1 Afferent Pharmaceuticals and runner up Pixtronix. The deals that followed all trailed each other’s heels much more closely.

The top deals in December were also more diverse in the sectors they represent when compared to the month before. Five out of the top six November deals were in healthcare (a software company captured the month’s No. 1 slot). In December, by contrast, the top six included companies from healthcare, software, electronics, Internet, and mobile and telecommunications.

Massachusetts December Venture Capital Deals

The aforementioned Afferent, a Boston-based company working on developing treatments to chronic pain, topped our December list with $23 million in Series A funding. Mobile display maker Pixtronix, based out of Andover, MA, came in second with $19 million in equity and warrants in a Series E round. Behind it came ExaGrid Systems, a Westborough, MA-based provider of data storage equipment and deduplication software that nabbed $16 million in its fifth venture round.

Other highlights from the December data, and a table of all the month’s equity deals, follow.

— November’s sector winner, healthcare, won again in December with 10 deals worth $66.51 million. Electronics followed with $40.9 million in five deals, nudging out the $40.7 million the Internet sector brought in through nine venture investments (one of which includes an unspecified equity round with backup services company VaultLogix). Software-the No. 2 sector in dollar terms in November-came in fourth with $30.5 million and five deals.

— Venture funding for Internet startups seemed to be on the mend in December. In November, the sector saw the biggest decline in deal numbers, dropping to three from nine in October. Not only were deals back up to nine in December, but the dollars invested in the sector were nearly $30 million over the $11.25 million invested in November.

— In December, energy investing looked like it was continuing the cautious comeback begun the previous month. The solo energy venture deal in December, $10 million in Series A funding to Harvest Power of Waltham, MA, is more than triple the $3 million that was invested in two energy companies in November.

December Venture Deals by Company

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