San Diego Bucks U.S. Trend in VC Funding, & Top 20 Area Deals

Xconomy San Diego — 

In contrast to the trend nationwide, more than two-thirds of the venture capital deployed in San Diego during the third quarter went into life sciences startups, according to data released today as part of the MoneyTree Report.

Venture funding for life sciences startups has been shrinking nationally, while software is booming. VC firms invested almost $3.6 billion in U.S. software companies during the three months that ended Sept. 30, according to the MoneyTree Report. That was the highest funding level for software in 12 years, and was more than 46 percent of the $7.8 billion that VCs invested nationwide during the third quarter. The software industry also counted the most deals—420—of any sector, and nine of the 11 largest investments during the quarter went to software companies.

In the San Diego area, venture capitalists invested about $214.3 million in 29 deals during the third quarter, according to MoneyTree data. The amount invested was about 19 percent higher than the $179.3 million that VCs invested in 19 San Diego companies during the previous quarter. But it was down nearly 15 percent from the $252 million that VCs put into 21 startups during in the third quarter of 2012.

More than two-thirds of San Diego’s total, or $144 million, went to life sciences companies, and 19 of the 29 deals, or almost two-thirds of the deal count, went to life sciences companies.

“San Diego has been a leading life sciences hub for 25 years and is known for this,” said Jay Lichter of San Diego’s Avalon Ventures. “San Diego is not really known as a deep software type town (a few successes, but not an industry),” Lichter added. “Most of the technology has spun out of the military contractors and has not been focused on new Web sciences.”

So how did San Diego’s venture capital get deployed? To provide a fuller picture, I’ve listed San Diego’s top 20 deals during the third quarter, according to the Money Tree data:

Otonomy, San Diego, $45.9 million

3D Robotics, San Diego, $30 million

On-Ramp Wireless, San Diego, $15 million

ViaCyte, San Diego, $12 million

Tragara Pharmaceuticals, Carlsbad, CA, $11.4, million

Suneva Medical, San Diego, $10 million

Intersection Medical, Carlsbad, $9 million

Auspex Pharmaceuticals, San Diego, $8.9 million

MicroPower Technologies, San Diego, $7.5 million

Acutus Medical, San Diego, $7.4 million

Freedom Meditech, San Diego, $7 million

PatientSafe Solutions, San Diego, $7 million

Lithera, San Diego, $6.7 million

DermTech International, San Diego, $5.8 million

Seragon Pharmaceuticals, San Diego, $4.6 million

KFx Medical, Carlsbad, $4.6 million

Seismic, Encinitas, CA, $4.5 million

SG Biofuels, San Diego, $4.3

BUMP Network, San Diego, $3 million

Applied Proteomics, San Diego, $2.9 million