With Biotech IPO Outlet, San Diego Venture Funding at 15-Year Low

Xconomy San Diego — 

Venture capital firms invested almost $758 million in 97 startups in the San Diego region last year, marking the slowest pace in 15 years, according to data from the MoneyTree Report.

Compared with 2012, when venture firms invested more than $1.1 billion in 105 companies, the amount of venture capital invested here was down by slightly more than a third, and the deal count declined by about 8 percent. The MoneyTree Report is prepared by the National Venture Capital Association (NVCA) and PricewaterhouseCoopers from data supplied by Thomson Reuters.

By one explanation, the total for venture capital was down because 2013 was such a great year for biotech IPOs.

“Biotech drives the numbers for San Diego,” says David Titus, president of the San Diego Venture Group. In an e-mail this morning, Titus writes, “2013 was the strongest year for biotech IPOs in the past 10-15 years. Eight San Diego companies went public, which means in many cases they did not raise late-stage money. If, on average, they had raised $30 million each, that would be another $240M in VC funding.”

Titus also noted that San Diego’s One Roof Energy, which helps homeowners finance the installation of rooftop photovoltaic solar energy systems, raised more than $100 million last year in a financing deal that wasn’t classified as venture funding. (The San Diego Venture Group has organized a presentation on the VC outlook for 2014 at its breakfast meeting set for Thursday at the Marriott Del Mar Hotel, with Bobby Franklin of the NVCA, Scott Tierney of Google Capital, and Carol Gallagher of Frazier Healthcare.)

Venture activity also was down during the fourth quarter in San Diego, with just $145.1 million invested in 23 deals. It was an 18 percent decline in dollars invested, and an 11 percent slide in deals, compared with the same quarter in 2012, when VCs invested $178.1 million in 26 deals.

The lowest previous fourth quarter was in 2002, when VCs invested nearly $145 million in 26 deals.

Most of the capital invested in San Diego last year went into companies specializing in biotech or medical devices, or about $566 million. Roughly $192 million was invested in software, cleantech, and other tech startups.

The top 10 deals of 2013 were:

1) Otonomy, biotech, $68.9 million

2) aTyr Pharma, biotech, $44.9 million

3) Achates Power, energy, industrial cleantech, $35.2 million

4) Auspex Pharmaceuticals, biotech, $30 million

5) Seragon Pharmaceuticals, biotech, $30 million

6) Acutus Medical, medical devices, $28 million

7) Applied Proteomics, software, $27.9 million

8) Topera, medical devices, $24.9 million

9) 3D Robotics, industrial, $24 million

10) Receptos, biotech, $21.2 million