San Diego’s Third-Quarter Venture Activity on Par, and Top 10 Deals

Xconomy San Diego — 

Venture capital funding for startups in the San Diego area ticked up slightly during the third quarter that ended Sept. 30, with $238.5 million invested in 27 deals, according to data from the MoneyTree Report.

That was about a 7.2 percent increase over the $222.4 million that VCs invested in deals in the previous quarter, and a 6.3 percent increase over the $224.3 million that venture firms invested in 28 startups during the same quarter in 2013. The MoneyTree Report is prepared by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Financial.

Yet San Diego has seen little change in overall venture activity from quarter to quarter since the beginning of the year. Here are some additional highlights of local VC activity from the MoneyTree data for San Diego:

—Life sciences startups continued to attract most of the capital, getting $168.6 million, or 71 percent, of all capital deployed in San Diego County. The 13 life science deals amounted to just under half of the total deals. The average deal size in San Diego’s life sciences sector during the third quarter amounted $8.8 million, increasing from $8 million in the same quarter of 2013.

—Venture funding in San Diego’s software sector increased by 38 percent over the previous quarter, with $37 million invested in six deals, compared to the $27 million that went into nine deals in the second quarter of 2014.

—Tech investments of all types—including software, semiconductors, computers and peripherals, IT services, and media companies—accounted for $56.1 million, increasing about 52 percent compared to the $37 million in tech investments during the prior quarter. This was up 177 percent over the same quarter last year, when all tech investments got just over $20 million.

—About 45 percent of third-quarter venture capital investments in San Diego went to early stage companies, a level comparable with the previous quarter. About 52 percent of the deals involved early stage companies, an increase from 46 percent in the prior quarter.

—Total investment dollars for expansion and later stage companies increased 5 percent from $124.8 million in the second quarter to $131.2 million in the third quarter. The deal count for expansion and later stage companies as well as the percentage of venture dollars invested in these companies was on par with the prior quarter.

Based on the MoneyTree data, the top 10 deals during the third quarter are listed below. The chart shows the name of company (and location), amount invested during the third quarter, business focus, and total amount of venture capital raised to date.

BioNano Genomics (San Diego)$31MDNA Analytics$76.4M
Epic Sciences (San Diego)$30MCancer Diagnostics$46.6M
Tracon Pharmaceuticals (San Diego)$27MBiopharmaceutical$41M
Acutus Medical (San Diego)$20.6MMedical Device$55.1M
Astute Medical (San Diego)$20.1MBiomarker Diagnostics$110.7M
Obalon Therapeutics (Carlsbad, CA)$16MMedical Device$49.3M
Veritone (San Diego)$15MSoftware as a Service$15M
SG Biofuels (San Diego)$11MAgricultural Biotech$34M
Achates Power (San Diego)$10.9MIndustrial Energy$65.3M
Legend 3D (Carlsbad, CA)$10M3D Imaging for Film Industry$46M