For startups, it seems no amount of funding is too small. At least that’s what we like to keep in mind when analyzing monthly financings for area companies.
February’s list of under-the-radar deals for Northwest startups was half as long as January’s, at just five deals. On the bright side, all five of the February under-the-radar transactions were equity offerings, while the 10 deals in January involved two debt-based financings. We define “under-the-radar deals” as startup transactions under $1 million (even if only by a few dollars), a distinction that separates them from the list of bigger venture deals sent to us earlier in the month by our partner CB Insights, a New York-based private company intelligence platform.
To be fair, though, we left a few deals off the list originally provided to us by CB Insights, as the companies came from industries that didn’t quite fall into our coverage area. To make the cut, we look for companies that are doing something new and innovative in the industries we report on, such as technology, life sciences, Internet, and energy. (Of course, this can be somewhat subjective.) New businesses in more traditional spaces such as oil and gas or straightforward consumer goods typically get left off the list.
Last month’s under-the-radar-deals ranged in value from $165,000 to $500,000. Three of the financings went to Washington-based companies, and two to startups working out of Oregon. None of these transactions were big enough that we reported on the deals when they first broke, but we still look to the list as an indication of trends in early-stage investing, or as bellwethers of which stealthy companies might be on the rise. February’s list included companies in software, energy, and biotech.
The biggest deal was the $500,000 in equity-based funding that went to Eden Rock Communications, a Bothell, WA-based developer of 4G wireless self-organizing networks; this company seeks to more successfully automate the deployment of wireless data services. Iverson Genetic Diagnostics, also of Bothell, WA, came in second with a $341,000 equity offering. We touched on this startup briefly before when it presented at the Angel Capital Expo put on by the Keiretsu Forum Northwest in October. This was the only company on our list that we had heard of before.
The third-biggest deal went to Home Comfort Zones, a Beaverton, OR-based maker of room-by-room home temperature control systems. It pulled in $300,000 in an equity and preferred stock offering, according to a regulatory filing. We might not typically report on a traditional thermostat maker, but it looks like Home Comfort is innovating in the area by crafting a device that varies heating and cooling by room, and tells consumers how much energy they are using for the task, as a way to help them change their habits.
At this point, it’s hard to tell what the shorter list means. It could indicate that investors are less inclined to put cash into smaller startups, or it could be a positive sign that startups would rather pursue larger venture rounds. Startup funding in February remained steady, as far as the bigger venture deals go. Earlier this month, Greg wrote about how in February, Washington startups pulled in $53.5 million across 10 deals, keeping that month’s venture funding stats relatively in line with the $57 million that went to eight companies in January.
We’ll have to wait and see how the startup investing landscape for March turns out. Meanwhile, check out our list of February under-the-radar deals in the Northwest:
|Eden Rock Communications||Bothell, WA||A developer of 4G wireless self organizing networks||Equity||$500,000|
|Iverson Genetic Diagnostics||Bothell, WA||A developer of advanced genetic testing||Equity||$341,000|
|Home Comfort Zones||Beaverton, OR||A maker of room-by-room home temperature control systems||Equity||$300,000|
|Etelos||Maple Valley, WA||A software platform for delivering Web-based applications||Equity*||$250,000|
|HM3 Energy||Gresham, OR||A developer of clean fuel produced from biomass waste||Equity||$165,000|
*includes some debt, options, and warrants