What Bubble? August Startup Funding in MA Slides Further to $156.5M

Xconomy Boston — 

The rate at which investors put money into startups continued to slow last month. Bay State tech and life sciences companies received $156.5 million across 27 equity-based deals, sinking further from the July total of $250.5 million. That’s according to data from FundingFlash, a daily roundup put out by CB Insights that tracks companies receiving venture capital, angel investment, and growth equity funding.

It’s a pretty dramatic drop from the first month of this summer, but August’s funding total for Massachusetts startups is still more than the amount companies pulled in in August 2010, which was $143.6 million across 30 deals. But there were fewer transactions (27) in August of this year. And the funding total in August 2010 marked an increase from the month before, unlike this year.

Staying true to form, healthcare companies took the top spot for deals inked and dollars raised last month, with $120.8 million raised across 15 deals. The amount raised by healthcare companies accounts for more than 75 percent of the dollars poured into startups in August. The top healthcare deal went to Fluidnet, an Amesbury, MA-based maker of electronic infusion pumps for administering IV fluids. The startup nabbed $25 million in Series C financing. Another healthcare startup working in medical devices, Lexington, MA-based T2 Biosystems, took the second-highest deal spot, with $23 million in a Series D financing.

Internet startups raised $20.9 million in seven deals, acting as a distant runner-up for dollars raised and number of deals last month. The highest Internet deal came in at sixth place overall for the month, at $7.5 million Series A investment for Boston-based PeerTransfer, a developer of tech for facilitating online tuition payments for international college students.

The energy sector didn’t show up at all on last month’s deals list, despite having had a pretty decent showing earlier this summer.

The results seem pretty grim overall, but there is potentially a bright spot. It looks like at least two-thirds of the financings from last month were early stage deals (Series B or earlier). The number of these transactions has often been pointed to as a stronger indicator of startup health than simply the total dollar amount of financing. There was also $22.4 million raised in five debt- or options-based startup deals—way more than the number of non-equity deals the previous two months of this summer saw.

Check out the list below of the top 10 financing deals in Massachusetts last month.

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