Venture Funding in Detroit Down in Q1, Still Higher Than 2011

Xconomy Detroit/Ann Arbor — 

According to MoneyTree data released today, first-quarter venture funding in southeast Michigan was down compared to the first quarter of 2012, though the deal count rose by one. Compared to last year, funding in Q1 2013 was down by almost two-thirds, with venture capitalists investing $17.6 million in 13 deals.

However, 2012 was a record-high year for Detroit in terms of venture activity. By contrast, during the first quarter of 2011, VCs invested only $3.9 million in seven deals.

Detroit’s venture activity mirrors national trends. According to MoneyTree data, there was a 6 percent decrease in capital deployed nationally during the first quarter of 2013 compared to the same quarter last year, when nearly $6.3 billion was invested in 868 deals.

The first-quarter deals in Detroit were:

—$5.2 million invested by 5am Venture Management, Frazier Healthcare, and Osage Partners in Atterocor, an Ann Arbor-based startup developing a therapy to treat adrenal cancer.

—$2.5 million invested by Northcoast Technology Investors in Gema Diagnostics, an Ann Arbor firm that makes tools for testing embryos during in vitro fertilization.

—$2.3 million invested by Detroit Venture Partners (DVP), DFJ International, the Michigan Economic Development Corporation (MEDC), Northcoast, and other undisclosed investors in Detroit-based social referral site

—$1.4 million invested by Early Stage Partners, the MEDC, and RSVP International in uRefer, the Ann Arbor startup behind the digital marketing platform Amplifinity.

—$1.2 million invested by Grand Angels and Start Garden in Blue Medora, a Grand Rapids-based company making software products that enhance the capabilities of Oracle, IBM, and VMware platforms.

—$1 million invested by DVP and another undisclosed investor in iRule, the Detroit-based maker of remote control apps.

—$1 million invested by Andreessen Horowitz Fund I, First Step Fund, Huron River Ventures, Hyde Park Venture Partners, and other undisclosed investors in Farm Logs, the Ann Arbor-based ag-tech startup.

—$850,000 invested by Ann Arbor SPARK in Algal Scientific, a Plymouth-based biomass production company.

—$750,000 invested by DVP, Ludlow Ventures, Griffon Venture Partners, Bizdom, and Start Garden in Chalkfly, the Detroit-based online school supplies startup.

—$640,000 invested by an undisclosed investor in 3D Biomatrix, a University of Michigan spinoff developing ways for drug researchers to test their therapies on cell cultures with three dimensions.

—$480,000 invested by DVP and Ludlow in UpTo, the Detroit-based social calendar app.

—$280,000 invested by Start Garden, Bizdom, and other undisclosed investors in GreenLancer, the Detroit startup offering cloud-based cleantech engineering services.

—$100,000 invested by Ann Arbor SPARK, the First Step Fund, the University of Michigan, and other undisclosed investors in Fusion Coolant Systems, a cleantech startup based in Ann Arbor and Detroit.

The MoneyTree Report is compiled by Pricewaterhouse Coopers and the NVCA, using data from Thomson Reuters.