Michigan Startups Reflect National Resurgence in Venture Capital Dollars

Xconomy Detroit/Ann Arbor — 

Michigan startups attracted $24.7 million in venture capital during the fourth quarter last year, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

Metabolic Solutions Development (MSDI), a drug maker based in Kalamazoo, MI, grabbed the largest share of the state’s take with nearly a $15 million investment from the Southwest Michigan First Life Science Fund and an undisclosed investor. Four other companies shared the remaining $10 million.

For the year, Michigan startups raised $151.6 million, a 13.8 percent jump from 2009 even though the number of local deals remained steady at 33.

That local companies grabbed a lot more money last year mirrored a national resurgence in venture capital financing after several years of weak performances dating back to the nation’s worst recession since the Great Depression. Across the country, investors poured $21.8 billion into startups in 2010, a 19 percent gain from the previous year and the first such annual gain since the end of 2007.

MSDI certainly had a good year. The company in the fall said it raised $23.5 million from Hopen Life Sciences and Southwest Michigan First Life Science Fund to help finance a Phase II clinical trial of a drug that treats Type 2 diabetes. Since 2006, MSDI has attracted nearly $50 million.

Making up the rest of that $24.7 million raised by Michigan startups in the fourth quarter of 2010:

GloStream, headquartered in Troy, MI, received $6.8 million from Beringea, a Detroit-based private equity firm. GloStream is developing software to manage electronic medical records.

—Ambiq Micro, a University of Michigan-bred startup developing energy efficient microprocessors, won $2.4 million from a host of investors, including the university, Cisco Systems, ARM, DJF Mercury, Draper Fisher Jurvetson, and Huron River Ventures, an early stage seed fund in Ann Arbor. The company recently moved to Texas from its original home in Ann Arbor.

—Plex Systems of Auburn Hills, MI, which makes on-demand software for manufacturers like automobile and medical device makers, attracted $500,000 from Apax Partners Worldwide.

—ReCellular, based in Ann Arbor, received investment, the amount of which was not disclosed, from Beringea. The company collects, refurbishes, and recycles old cell phones.

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