$12.1 Billion in Venture Capital Deployed to Startup Ecosystem in First Quarter

Apr 19, 2016 0

WASHINGTON, DC – Venture capitalists invested $12.1 billion in 969 deals in the first quarter of 2016, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters.

Total venture dollars deployed to startup companies for the quarter remained flat and total deal count was down 5 percent, compared with the fourth quarter when $12.0 billion was invested in 1,021 deals. Compared with Q1 2015, dollars and deals are both down 11 percent. This is the ninth consecutive quarter of more than $10 billion in venture capital invested in a single quarter.

Bobby Franklin

Bobby Franklin

“Forecasting the year based on the first quarter is always difficult, but a few interesting trends stand out. While total venture investment activity didn’t jump out of the gate as quickly as last year, it was still a strong first quarter for venture activity compared to recent years,” said Bobby Franklin, President and CEO of NVCA. “Of the decline that we did experience, most of that can be attributed to nontraditional investors scaling back their investment activity and refocusing on their core businesses. After a string of strong quarters for fundraising, venture investors will continue to be busy putting risk capital to work by finding and funding innovative ideas and growing them into the next generation of great American companies.”

“The first quarter appears to tell us that investors still have faith in the venture ecosystem,” said Tom Ciccolella, US Venture Capital Market Leader at PwC. “However, the increase in expansion and later stage financing, combined with the drop in first-time financing, suggests a shift towards relatively mature startups.”

Top Deals

The top 10 deals accounted for 25 percent of total dollars invested in the first quarter, up from 18 percent of total venture capital deployed during the fourth quarter. Compared to the fourth quarter, the first quarter’s top 10 deals came from a diverse range of industries, though it also saw investments in categories not featured last quarter—Computers and Peripherals and Industrial/Energy.

Industry Analysis

The Software industry continues to receive the highest level of funding of all industries, receiving $5.1 billion going into 376 deals for the quarter, a 12 percent increase in dollars and a 5 percent decrease in deals versus the fourth quarter of 2015. Half of the top 10 megadeals (investments of $100m or more) were in the Software industry.

The Biotechnology industry received the second largest amount of venture capital for the quarter, with $1.8 billion going into 118 deals, representing an 11 percent increase in dollars and a 19 percent increase in deals, compared with the previous quarter. Investments in the Life Sciences sector (Biotechnology and Medical Devices combined) during the first quarter accounted for $2.3 billion going into 177 deals, staying flat in dollars and declining 3 percent in deals. Investments in Life Sciences companies accounted for 19 percent of all venture capital deployed to the startup ecosystem in the first quarter.

Media & Entertainment companies received the third largest amount of venture capital for the quarter with $930 million deployed across 109 deals. Notably, Computers and Peripherals companies received the fourth largest amount of venture capital for the quarter with $871 million deployed across 14 deals, a 477 percent increase in dollars compared to the fourth quarter. The second largest deal of the top 10 megadeals was within the Computers and Peripherals space.

Ten of the 17 MoneyTree industries remained flat or saw increases in dollars invested in the first quarter, including Telecommunications (157 percent increase), Electronics/Instrumentation (118 percent increase), and Business Products and Services (107 percent increase).

Venture capitalists invested $2.4 billion into 232 Internet-Specific companies during the first quarter of 2016, dropping 24 percent in dollars and 4 percent in deal count, compared with the fourth quarter of 2015 when $3.1 billion went into 242 deals. “Internet-Specific” is a discrete classification assigned to a company with a business model that is fundamentally dependent on the Internet, regardless of the company’s primary industry category.

Stage of Development

Dollars invested in Seed stage companies declined 10 percent during the first quarter, totaling $418 million in 62 deals and representing only 3 percent of all venture investment dollars for the quarter and 6 percent of all deals. Early stage investment declined 18 percent in dollars and 22 percent in deals with $4.2 billion going into 406 deals. Seed/Early stage deals accounted for 48 percent of total deal volume in the first quarter, compared with 57 percent in the prior quarter. The average Seed stage deal in the first quarter was $6.7 million, down from $8.2 million in the fourth quarter. The average Early stage deal in the first quarter was $10.3 million, up from $9.8 million in the prior quarter.

Expansion stage investment was up 25 percent in dollars and 9 percent in deals for the quarter, at $4.1 billion and 288, respectively, from the previous quarter. Expansion stage deals accounted for 30 percent of all venture deals in the first quarter. The average Expansion stage deal was $14.1 million, up from $12.3 million in the fourth quarter.

Investments in Later stage companies increased 10 percent to $3.5 billion going into 213 deals in the first quarter. Later stage deals accounted for 22 percent of total deal volume for the quarter and increased 20 percent in deals. The average Later stage deal in the first quarter was $16.3 million, down from $17.7 million in the prior quarter.

First-Time Financings

First-time financing (companies receiving venture capital for the first time) dollars decreased 31 percent to $1.7 billion in the first quarter as the number of deals declined by 16 percent to 297. First-time financings accounted for 14 percent of all dollars and 31 percent of all deals in the first quarter.

Of the companies receiving venture capital funding for the first time in the first quarter, Software companies captured the largest share, accounting for 39 percent of the dollars and 41 percent of the deals with $666 million going into 121 deals. First-time funding in the Life Sciences sector during the first quarter was down 29 percent in dollars and 37 percent in deals, dropping to $404 million going into 33 deals.

The average first-time deal in the first quarter was $5.7 million, down from $6.9 million in the prior quarter.

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Abraaj Group leads BigBasket’s $150 million fundraising

Mar 22, 2016 0

Bengaluru– Global private equity investment firm Abraaj Group on Tuesday led a $150 million fundraising drive by Indian E-commerce grocery startup BigBasket.

“We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies,” Abraaj Group Asia head Omar Lodhi in a statement.

“Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position,” he added.

In addition to the participation of existing investors Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital in the BigBasket’s latest fundraising, new investors, World Bank subsidiary International Finance Corporation (IFC) and Sands Capital also marked their entry.

“We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months,” said BigBasker co-founder V.S. Sudhakar about the utilisation of the raised funds.

“The proceeds of this round of fundraising will be used to finance BigBasket’s growth through further penetration into existing markets, expansion into Tier II cities across India, scaling-up of its recently launched express delivery and specialty store business that caters to top-up and emergency purchases, and increasing the product range offered to customers,” he added.

Founded in 2011, the online grocery startup currently operates in eight metro and 10 tier two cities retailing over 19,000 products from a range of 1,000 brands which include fruits, vegetables, meat, beverages and personalAcare products.

For Abraaj Group, this is the third investment in E-commerce, after acquiring stakes in Turkish online retailer Hepsiburada and Dubai-based cab hailing app Careem.

After entering India in 2006, this is its latest move is the here, following investment in Hyderabad based Care Hospitals and a gigawatt scale renewable energy platform partnership with Aditya Birla Group.

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Swathi Kiran-founded Constant Therapy Raises $2 Million in Venture Capital

Mar 11, 2016 0

BOSTON– Constant Therapy, an innovator of science-based, customized brain rehabilitation apps founded by Boston University Professor Swathi Kiran, has raised $2 million in Series A financing.

Swathi Kiran

Swathi Kiran

Golden Seeds led the round with participation from Kapor Capital, Launchpad Venture Group, Pond Capital and Community Health Network of Connecticut. The investment will enable the company to expand the scientific research, data, marketing and development behind its product, the company said in a statement.

The company was founded in 2013 by Kiran, who was head of the Aphasia Research Laboratory. While working with patients, Kiran noticed that people with cognitive, language, an

Veera Anantha

Veera Anantha

d speech disorders could benefit from a tool that combined technology with communication therapy. She teamed up with three notable technologists to develop mobile versions of proven speech therapy tasks and co-founded the company. They include: Dr. Veera Anantha, President, Mahendra Advani, Architect and Ehsan Dadgar, Mobile Development Lead.

Constant Therapy’s customized rehabilitation program, which enables continuous therapy anytime, any place, has earned accolades from national organizations in recent months including: the American Heart Association People’s Choice Award for Best Health Technology, AARP 2015 Consumer Choice Award for Health Innovation and Village Capital and Global Health & Social Innovation Capital Partners Award.

“Constant Therapy quite literally puts speech, language and cognitive therapy in your pocket,” said Keith Cooper, CEO and serial entrepreneur who joined the company last spring. “Developed by some of the world’s foremost experts in brain rehabilitation, it allows us to harness both data and science to optimize the effectiveness of treatment, customize it for each patient and then deliver it for individual use, or as an integral part of clinician-led therapy.”

Constant Therapy’s mobile solution is aimed at improving the cognitive and language skills of patients with stroke, brain injury, dementia, aphasia and learning disorders so they can perform better at everyday tasks. Patients are able to accelerate their recovery via the company’s NeuroPerformance Engine™, an advanced analytics engine, which analyzes patient performance and automatically customizes their therapy program for their specific needs. The company’s growing library of therapeutic tools today includes 65 science-based therapy categories and more than 60,000 exercises.

“We believe Constant Therapy can be a disruptive positive force in the $10 billion market for brain rehabilitation services,” said Kevin Ohashi, PhD, managing partner and co-founder of Pond Capital. “Unlike traditional paper-based therapies that rely on static and manually delivered exercises, its mobile exercises are dynamic, updated constantly and customized for each patient. Clinicians can use Constant Therapy with their patients in clinic and the patients can continue to work independently when they go home.”

Constant Therapy is the only company that partners with speech and language pathologists and other therapists by giving them access to the full version of the program for free to use with patients in their care. Some healthcare organizations that use Constant Therapy include Spaulding Rehabilitation Network, the Stroke Comeback Center and The MossRehab Aphasia Center.

Patients can use the program at home by purchasing a subscription to Constant Therapy for $19.99 per month, $199.99 per year or $299.99 for three years.

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Startups raise 766 financing rounds in February

Mar 2, 2016 0

WALTHAM, MA–Startups in the United States raised 766 financing rounds in February, a seemingly strong number amid market volatility and the bubble talk that has hung around recently, according to PitchBook.

In its monthly snapshot, PitchBook said that more than 70% of the capital invested during the month was deployed in roughly 11 percent of the deals closed, however, including the $1 billion round for Chinese sports streaming platform LeTV and an almost $800 million financing of cinematic reality company Magic Leap.

PitchBook-logoHere are the key highlights:

33 February deals (<4%) raised $50 million or more.

33% of the total deals were made at the early stage, whereas late stage accounted for 20 percent.

6 new and existing unicorns attracted funding rounds.

Source: PitchBook

Other facts from the PitchBook:

“82 VC-backed companies were exited by investors in February. Notable acquisitions of the month include Microsoft’s $450 million purchase of Xamarin and the $410 million buy of Ellipse Technologies by NuVasive. After more than a month with zero U.S. IPOs, February saw three VC-backed companies enter the U.S. markets through an initial offering—Editas Medicine, Proteostasis Therapeutics and AveXis.

605 VC investors were active last month, though just one investor (New Enterprise Associates) completed double-digit deals and only 142 (23.5%) completed more than one. Deal activity during the month breaks down as follows—seed: 19%, early stage: 54%, late stage: 25%.

36 VC funds closed last month, courting more than $7 billion in commitments. Seven of those vehicles closed on $500 million or more, including General Catalyst Group VIII ($845 million) and Index Ventures Growth IV ($700 million). Nearly two-thirds of the new funds were closed by U.S.-based investors. Chinese VCs closed four vehicles, adding more than $1.3 billion.”

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Naspers to invest $250 million more in ibibo

Feb 24, 2016 0

Bengaluru–Indian online travel company ibibo on Wednesday announced it raised $250 million from internet and media company Naspers to extend its position in Indian hotels category and additional technology innovations.

“Our objective is to solve problems for the transportation and accommodation providers and to connect them to the travellers. The commitment from both Naspers and Tencent to ibibo is testimony to the strength of our platforms and the opportunities ahead,” said ibibo Group founder Ashish Kashyap in a statement.

According to the statement, ibibo processed more than Rs. 6.5 million transactions from October to December in 2015.

ibibo Group owns hotel booking engine and ticket aggregator Goibibo.com and bus ticket booking platform redbus.in.

“The Indian ecommerce market, and the online travel segment in particular, offers exciting growth prospects for us as a group,” said Naspers Group chief executive Bob Van Dijk in the statement.

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Snapdeal raises $200 million from various investors

Feb 15, 2016 0

New Delhi–Online marketplace Snapdeal said on Monday it raised $200 million from investors led by Canada’s Ontario Teachers’ Pension Plan and funds advised by Iron Pillar.

“We see these investments as a continuing endorsement of Snapdeal’s strategy to build India’s most reliable and frictionless commerce ecosystem,” said a company statement, quoting Chief Financial Officer Anup Vikal.

The company said it continued to make targeted investments in building internal and external capabilities that would enable it to deliver optimal experience for the millions of buyers and sellers who transact daily on Snapdeal.

Founded in 2010, Snapdeal has more than 275,000 sellers, 30 million plus products and a reach covering 6,000 plus towns and cities across India.

In its journey so far, Snapdeal has partnered with several global investors and individuals such as SoftBank, BlackRock, Temasek, Foxconn, Alibaba, eBay Inc., Premji Invest, Intel Capital, Bessemer Venture Partners, and Ratan Tata.

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Aasaanjobs raises $5 million in Series A funding

Feb 15, 2016 0

New Delhi–Online marketplace for recruitment, Aasaanjobs has raised $5 million in Series A round of funding led by Aspada Advisors with participation from existing investors.

This was a follow-up from the seed round where the platform raised a funding of $1.5 million led by IDG Ventures and Inventus Capital in January 2015.

“The company would use the funds to automate its online recruitment marketplace and expand to new cities. The company would set up operations in Pune and Delhi in the first quarter and Bengaluru in the second quarter of 2016,” said Aasaanjobs CEO Dinesh Goel.

The fresh inflow of capital will help the company in taking its HR services on the cloud computing.

This technological edge will pave the way for Aasaanjobs’ expansion into newer geographies.

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RatanTata invests in two more start-ups: Moglix and Invictus Onclogy

Feb 8, 2016 0

BENGALURU–To encourage entrepreneurship, Tata Sons chairman emeritus Ratan Tata on Monday announced investing an unspecified amount in two more start-ups Moglix and Invictus Onclogy, which are based in New Delhi.

Ratan Tata

Ratan Tata

As an e-commerce firm, Moglix specialises in procurement of industrial products in business-to-business (B2B) space, while medical firm Invictus is an innovation-driven firm developing next-generation cancer therapeutics.

By investing in Moglix, Tata has forayed into a manufacturing tech-start-up as an investor, adding to his varied portfolio of e-commerce and new-age tech-enabled firms.

“With his expertise in the manufacturing sector, Tata will play an important role in mentoring Moglix on business growth, global expansion and leadership,” the company said in a statement.

Founded by Rahul Garg, an ex-Google geek, Moglix is focused on disrupting B2B industrial products space for suppliers and buyers the world over.

“We are pleased to have an icon of Indian manufacturing as our advisor. Tata’s contribution to the manufacturing sector has been inspirational and we look forward to his guidance to steer the company in transforming the buying and selling process for manufacturers across the country,” Garg said in a statement.

Moglix recently raised undisclosed pre-series A funding from venture fund Accel Partners and Jungle Ventures to enhance its e-platform, build a wider supplier base and increase marketing spend across Asia.

In Invictus, Tata has invested as part of its series A financing round along with institutional investors Navam Capital and Aarin Capital.

“The funds will be used to advance our lead molecule to complete phase-one clinical studies and to file a second investigational new drug application, which translates into substantial value inflections for us over the next 18 months,” Oncology said in a statement.

Invictus Oncology employs a supra-molecular technology platform to design anti-cancer drugs that home into the tumour and modulate the tumour immune response.

“Tata’s investment is an affirmation of the technology quality we have developed. We are getting good traction from investors in India and overseas,” Oncology co-founder and Harvard Medical School assistant professor Shiladiyta Sengupta said in the statement.

In the past 18 months, Tata has invested in a slew of start-ups, including Infinite Analytics Inc., Snapdeal, Paytm, Ola, Tracxn Technologies, Dogspot.in and Zivame.

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HD Medical Secures Strategic Investment from Maxim Ventures

Feb 5, 2016 0

SUNNYVALE, Calif.– Sunnyvale-based HD Medical Inc. and Maxim Integrated Products, Inc. of San Jose announced that Maxim has made an $800,000 strategic investment in HD Medical, in the form of a convertible promissory note intended to convert into HD Medical’s next preferred equity round of financing.

Shailendra Mahajan

Shailendra Mahajan

The majority of Maxim’s investment will be dedicated to HD Medical’s new product development of its visual stethoscope technology utilizing a low power Maxim chipset for the advancement of digital health.

“With Maxim’s impressive investor confidence, HD Medical is well poised for future growth and investment,” said Arvind Thiagarajan, Founder & CEO of HD Medical, Inc. “This agreement will accelerate as well as enhance our new product development and position us to ramp our revenues.”

Thiagarajan is responsible for the securing several patents upon which HD Medical’s current and future products are based. Mr. Thiagarajan was given a special award from Member of Parliament for Science and Technology from the Government of India for his contributions to research and science and his work as part of HD Medical won the Socially Relevant Product (SRP) award in ITT Madras, according to the company’s website.

HD Medical develops the ViScope visual stethoscope product family.

“We are excited by the growth and vision we’ve seen from HD Medical’s team,” said Shailendra Mahajan, Managing Director of Maxim Ventures.

“We believe that the product roadmap directly corresponds with the healthcare professional’s needs and also opens up opportunities in tele-medicine and home healthcare markets. Our goal is to ensure both our companies significantly contribute to the advancement of digital health,” said Chris Neil, SVP of Maxim and Head of Maxim Ventures.

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Ankit Mahadevia’s Spero Therapeutics gets $30 million funding

Feb 3, 2016 0

CAMBRIDGE, MA– Spero Therapeutics, a biopharmaceutical company founded to develop novel therapies to treat bacterial infections, announced existing Series A investors Atlas Venture, SR One, MRL Ventures, Lundbeckfond Ventures, The Kraft Group and Partners Innovation Fund will provide $30 million in Preferred B funding.

Ankit Mahadevia

Ankit Mahadevia

“We are very privileged to have the strong support of our existing investors to close this Series B financing, which will allow us to continue to advance the important work we are doing to combat the global public health threat of antibiotic resistance.,” said Ankit Mahadevia, M.D., President and Chief Executive Officer of Spero. “Humankind is currently losing a race against bacteria now resistant to every known antibiotic—known as ‘Superbugs’—with immeasurable healthcare consequences if left unchecked. Spero is executing an aggressive effort to develop important therapies that differ mechanistically and functionally than available treatments in order to address this growing threat.”

Spero will use proceeds from this financing to further progress its unique therapeutic “Potentiator Platform,” intended to improve drug potency and enhance the utility of existing anti-infective medications. Funding will also enable the organization to advance efforts in support of its DHFR program which targets Gram-positive and negative bacteria, fungi and protists. The DHFR program seeks to expand a novel antifolate’s antibacterial spectrum to treat trimethoprim-resistant isolates including key Gram-negative pathogens.

“Spero is making excellent progress in its effort to create novel therapies to combat severe infections by reinvigorating existing antibiotics and returning their relevance within the field of anti-infectives,” said Jean-François Formela, M.D., Partner at Atlas Venture. “We are excited to continue working with a company doing truly innovative work that has the potential to fulfill such an important unmet medical need.”

Added Rez Halse, Ph.D., Partner at MRL Ventures: “The unanimous reinvestment decision among Series A backers is a reflection of the promise and progress made to date. The unique Spero Potentiator Program, and other early stage efforts offer the potential to play a critical role in addressing the growing antibiotic resistance threat.”

Cambridge, MA-based Spero is a biopharmaceutical company developing a pipeline of novel treatments for bacterial infections. The company’s pipeline of anti-infective agents is one of the most unique in the industry – focused on Gram-negative bacterial infections and Gram-positive and negative bacteria, fungi and protists.

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