February Freeze: Massachusetts Startup Funding Shrinks to $130.9 M

Xconomy Boston — 

How far the mighty fall. Investments in Massachusetts startups soared to $242.5 million in January, but last month tech and life sciences companies raised just over half that, $130.9 million, in 24 equity-based deals, according to data provided by CB Insights’ FundingFlash, a daily roundup of companies receiving venture capital, angel investment, and growth equity funding.

Healthcare companies raised the most money for the month, but dollars invested in those companies fell by roughly 50 percent from January levels. The sector nabbed $73.6 million across seven deals in February, and accounted for the three largest financings of the month. CardioFocus, a Marlborough, MA-based medical devices firm, nabbed the top deal at $30.6 million.

If there was a bright spot last month, it was for non-Internet software startups, whose technology focuses on things like virtualization, data storage, and design of electronic components. Last month software sector took the second place spot for dollars raised, with $23.4 million raised in five financings—a jump from the $9 million it pulled in through two deals in January. The top software deal went to Burlington, MA-based DynamicOps, a Credit Suisse virtualization software spinout, which raised $11.3 million in a Series B financing.

The Internet sector led for the total number of deals inked last month (nine) but came in third place for the dollar total that those financings amounted to ($16.5 million). Five of those nine deals each rang in at under $1 million.

I’m fairly certain that the March numbers will be a bit more promising when they come in next month. In the past two weeks alone we’ve seen $51.7 million for waste-to-energy startup Harvest Power of Waltham, MA, $15 million for Lexington, MA-based online jewelry customization startup Gemvara, and $32 million for HubSpot, a Cambridge, MA-based developer of online marketing software.

Meanwhile, read below to see what added up to February’s slim funding total.

It was a fairly big month for non-equity-based deals last month, with 12 startups pulling in $15.4 million through a mix of debt- and rights-based offerings.