Healthcare Dominates Massachusetts’ Top 10 Deals

Earlier this week, my colleague Bruce took a look at venture capital activity across the country in the first quarter of 2010, and found that investors were sinking more cash into startups than they did a year ago.

We track these deals with data provided by private company intelligence platform CB Insights, Dow Jones VentureSource, and MoneyTree, a report compiled by PricewaterhouseCoopers and the National Venture Capital Association using data from Thomson Reuters. Each has their own way of tracking venture dollars and defining deals, so the figures for first quarter venture investing ranged from $4.7 billion to $5.9 billion.

But we also like to provide a closer look by highlighting the top 10 deals for each of the regions we cover, which offers a sense of the trends in the size of individual transactions, the sectors that have gotten the most cash, and the companies that are growing in prominence. The list I have here for the top 10 deals from January to March is drawn mainly from the MoneyTree data, and checked against our Xconomy archives, as well as the Dow Jones and CB Insights numbers.

The highest deal came in at $36 million to TransMedics (we originally reported the deal at $35.4 million based on an SEC filing, but the company later announced it as a $36 million round). The Andover, MA-based company develops systems for transporting organs for transplant. The next three transactions followed closely at TransMedics’ heels, each with $35 million. All four top spots went to life sciences companies (as did another three on the top 10 deals list from Q1 2010).

It’s no surprise to me that seven of the top 10 deals in the first month of this year went to life sciences firms. We track venture investing dollars monthly, thanks to data provided to us by CB Insights, and the sector was the leader in venture dollars in February and March, and a close runner-up in January.

But that doesn’t mean other sectors are necessarily flagging. Energy had a pretty strong showing on the top 10 deals list, with a $23.8 million deal for Konarka Technologies, a Lowell, MA-based developer of photovoltaic material for capturing solar energy, and $19 million for Luminus Devices, a Billerica, MA-based company developing chipsets using LED technology, for lighting applications that range from residential fixtures to display projectors. (It’s an industry I wrote about earlier this week.)

The Internet sector showed up on the list, too. Boston-based Carbonite, an online data backup company, raised $20 million in Series D funding. In January, we also wrote about how healthcare payment software company IkaSystems attracted $120 million from Providence Equity Partners and Essex Woodlands Health Ventures, but the deal didn’t make it onto the list because it originated last year and spanned multiple quarters. Still, I think the mammoth size of that deal has carried through in terms of the health of venture investing early this year.

It’s also important to look at Massachusetts’ numbers beyond the top 10 deals. All told, venture-backed Bay State companies pulled in a total of $590.7 million across 67 deals in the first three months of this year, according to the MoneyTree Report. The money raised from the top 10 transactions accounts for about 45 percent of these investor dollars. I think it’s a good sign that the big deals are sharing the stage with smaller and medium-sized financings, as investors are willing to meet funding needs in the different capacities demanded by the diverse array of startups in the state. Also, five out of the top 10 deals were Series A or B rounds, and the other half were later stage transactions, showing that VCs are investing money at all stages of a startup’s lifecycle.

Here’s the full list of those top 10 deals, along with the stories we wrote as news of them first broke.

1. TransMedics (Andover, MA), $36 million, Series E (story).

2. Genetix Pharmaceuticals (Cambridge, MA), $35 million, Series B (story).

3. Alnara Pharmaceuticals (Cambridge, MA), $35 million, Series B (story).

4. Eleven Biotherapeutics (Cambridge, MA), $35 million, Series A (story).

5. Konarka Technologies (Lowell, MA), $23.8 million, Series G (story).

6. Artisan Pharma (Waltham, MA), $22 million, Series B

7. Rhythm Pharmaceuticals (Boston, MA), $21 million, Series A (story).

8. Carbonite (Boston, MA), $20 million, Series D (story).

9. Luminus Devices (Billerica, MA), $19 million, Series F (story).

10. Intrinsic Therapeutics (Woburn, MA), $18 million (story).

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