There seems to be a theme in Massachusetts venture investing right now. Things aren’t quite as hot as they were earlier this year, but are still trumping last year’s numbers for the same period. That’s what my colleague Greg noted about the MoneyTree report for Q3 2011 venture investing. And that’s what I’ve observed here with data from CBInsights FundingFlash—a daily roundup of companies receiving venture capital, angel investment, and growth equity funding—surrounding startup deals last month in Massachusetts.
On to the specifics. Twenty-nine Bay State startups raised a collective $253.8 million in equity-based deals in September. That’s an increase from the August ($156.5 million) and July ($250 million) funding totals. And September 2011’s funding is well above the total from September 2010, when startups pulled in $146.7 million in 25 transactions. But it’s still nowhere close to June’s massive $564.7 million pot, so talk of a bubble might have been premature.
The surge in September financing can largely be attributed to a $125 million Series F funding round for Westborough, MA-based Boston-Power, an advanced lithium-ion battery developer. (Note, this deal wasn’t included in the MoneyTree Report, likely because SEC documents for it had not yet been filed.) While the financing—which came largely from the Chinese government and a Beijing-based venture firm—helped plump up the deals total for the month, its overall effect on Massachusetts is mixed. As part of the deal, Boston-Power cut about 35 percent of its 80-person work force in the state as it shifts operations to China to pursue electric vehicle applications for its technology there.
The Boston-Power deal handily made energy the leading sector for the month, with $131.8 million raised across three deals. Healthcare followed with $71.2 million raised in eight deals, which included $23 million for Tokai Pharmaceuticals and $15 million for Tensha Therapeutics, both of Cambridge, MA. An SEC filing in September showed that Watertown, MA-based Arsenal Medical had raised $12 million, but just this week the company announced an $18 million financing round, which included $15 million for its new spinout, 480 Biomedical.
The Internet sector had the highest number of deals last month, with 10, and came in third for funding raised, at $39.2 million. The top deal in that sector and the fourth-largest deal of the month was a $13 million Series D financing for Boston-based Visible Measures, a maker of software that helps advertisers and publishers track the performance of online video. Massachusetts companies also raised another $10.5 million in 10 debt- or rights-based financings last month.
Check out the list below for details on the top 5 deals: