VC Investment in Boulder/Denver Companies Declines in First Quarter

Xconomy Boulder/Denver — 

[Updated 4/23/13 2:30 pm. See below.] The year is off to a slow start in terms of venture capital investing, both for companies in the Boulder/Denver area and around the country, according to the MoneyTree Report released today.

Sixteen companies in the Boulder/Denver region raised $77 million in the first quarter, which is the lowest quarterly amount since the first quarter of 2010, according to the report. In the fourth quarter of 2012, 21 area companies raised $86.3 million.

Colorado’s sluggish start is in keeping with the national trend, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association (NVCA), based on data from Thomson Reuters.

One reason for the drop is that venture capital firms are consolidating, according to John Taylor, who heads research for the NVCA. Fewer firms are able to raise funds, and those that can are raising smaller funds. Venture capitalists also are investing less in industries that require a lot of capital, such as cleantech, Taylor said.

WellTok’s $18.7 million deal was the largest in the area. The Denver-based company is producing an online platform that uses social media, competitions, and gamification to help insurance plans work with clients to improve their health and cut costs. Emergence Capital Partners, InterWest Partners, and New Enterprise Associates were the firms that invested in WellTok’s financing round.

Two other deals topped the $10 million mark. Convercent, a startup based in Denver, raised $10.2 million in a round that included Azure Capital Partners and Mantucket Capital. Convercent develops cloud-based compliance software.

Ciris Energy raised $10 million. The Centennial, CO-based company is trying to develop a system to convert coal to natural gas using microbes.

The figures for Boulder/Denver are for companies located in the Denver and Boulder metropolitan statistical areas, which span 11 counties around the two cities. There was an additional $1.9 million deal in the part of Colorado outside that area. In the fourth quarter of 2012, two companies outside Boulder/Denver raised a combined $10.4 million. [Updated to provide numbers for the entire state.]

The rest of the Boulder/Denver area’s 10 biggest deals of Q1:

BiOptix raised $6.23 million

Photobucket raised $5.65 million

Novinda raised $5 million

Luca Technologies raised $4 million

Infinite Power Solutions raised $3.87 million

Coalfire Systems raised $3.55 million

TeamSnap raised $2.75 million