Venture capital investments in Maine up for Q2
Maine's venture capital deals more than doubled in value and deal numbers in the second quarter over the same period last year, and were up significantly from the first quarter, though the funding amounts and deal numbers are still small compared to national figures, a new report said.
The data was released Friday in a new MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association. The report's data came from Thomson Reuters.
Maine's two deals in the second quarter amounted to $16.1 million compared to the one deal in the same quarter in 2013 for $6.6 million, according to the report. Deals for the first quarter were down significantly from last year's first quarter with two deals at $758,000, compared to two deals worth close to $5 million in the first quarter of 2013. The names of the Maine companies included in the report's venture funding were not available at press time.
Nationally, venture capitalists invested $13 billion in 1,114 deals in the second quarter, the highest level since the last quarter of 2000, the report noted.
The country's software companies drew the most investments, reaching $6.1 billion in the second quarter, the fourth time since 1995 that software company investments topped $6 billion in a single quarter.
"Investments going into companies with disruptive technologies remained strong in the second quarter, and VC investing is on pace to exceed the $30 billion invested in 2013," Mark McCaffrey, technology partner at PwC, said in a prepared statement.
NVCA President and CEO Bobby Franklin attributed the second-quarter jump to, "a handful of eye-popping investment rounds, including a record-setting funding round of $1.2 billion." That deal was with Uber Technologies Inc., which reportedly is testing the Portland market. Uber has smartphone app-based ride services in 140 cities.
Franklin noted he's heard anecdotal information from association members that new investors are entering the innovation economy fray, including hedge funds, mutual funds and other non-traditional investors who are directly investing into pre-initial public offering companies.
Also faring well were Internet-specific companies nationwide, with venture capitalists pumping $2.7 billion into 270 Internet companies, up 18% in dollars and 20% in deals than the first quarter of 2014.
Seed-stage investments rose 46% in dollars and 20% in deals with $189 million invested into 55 deals in the second quarter versus the first quarter. Companies getting venture capital money for the first time increased 48% to $1.9 billion in the second quarter, while the number of companies rose 20% over the prior quarter to 351.
Separately, Maine Angels Chair Sandra Stone said that as of July 2014, that group’s members have collectively invested over $12.5 million in 52 companies, 96% of which are in the northern New England region. Twenty two are Maine companies. The average individual investment in a deal is $35,000, she said in an email to Mainebiz, and the average initial deal range is $125,000 - 250,000.
In 2014, the angel group invested in five new companies to date in all of New England, and had 14 follow-on rounds, six of which were Maine companies. The group still has 40 active companies in its portfolio, 15 of which are in Maine, 22 in New England and three elsewhere.
Stone added that there have been over 50 additional investments rounds in some of the Maine Angels portfolio companies. Some companies have attracted multiple follow-on rounds so that nine have received over $400K and two have received over $1M in investment.
For companies requiring a higher raise, the group syndicates with strategic partners such as the Maine Venture Fund and Maine Technology Institute, or other angel groups within the New England Angel Capital Association region, which has 23-plus groups. The Maine Angels Investment Network now has more than 77 members who are accredited investors per UlSl Securities and Exchange Commission criteria.
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