Despite a steady drumbeat of dour tidings in the credit markets late last year, venture capital funds secured $11 billion in capital commitments in the fourth quarter, the highest national total since the second quarter of 2006.
Venture firms raised $34.7 billion in capital for the year, according to Stamford-based Thomson Financial and the National Venture Capital Association, up 9 percent from 2006. Fundraising hit its highest level since 2001 and the zenith of the Internet bubble, when venture capitalists corralled $38.8 billion.
Bessemer Venture Partners, which has a Westport office, raised among the largest funds in 2007 with $1.3 billion in capital.
In the fourth quarter, 70 companies in the tri-state area received $471 million in venture capital, the third-highest quarterly total since the Internet bust. For the year, more than 250 companies received $1.7 billion in capital, down slightly from 2006 totals.
What”™s more, those totals could be surpassed due to Norwalk travel search engine company Kayak Software Corp.”™s registration Jan. 8 of $166 million in new funding.
Also in January, Stamford-based XLerant Inc. raised $1.2 million in initial funding as it develops budgeting software for managers at smaller businesses who lack financial backgrounds.
In the fourth quarter of 2007, New Haven-based Optherion Inc. led all Connecticut companies with a $37 million investment as it develops technology to prevent blindness in patients with age-related macular degeneration.
Westport-based Oak Investment Partners participated in the largest single deal in the region for the third quarter of 2007, a $33 million investment in Argus Information and Advisory Services L.L.C. of White Plains, N.Y. Argus helps credit card issuers manage risk in their portfolio and employs about 60 people.
In the fourth quarter, 31 venture-backed companies held initial public offerings of stock for proceeds of $3 billion, the highest IPO total since the third quarter of 2000. For the year, 86 venture-backed companies raised $10.3 billion by going public.
On the eve of major stock market declines in mid-January, Danbury-based Biodel Inc. joined the list of IPO hopefuls as it develops treatments for endocrine disorders that can cause diabetes and osteoporosis.
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Conversely, Thomson Financial tracked just 46 acquisitions involving venture-backed companies, the lowest total in a decade. One in five deals netted investors less than the amount they sunk into a company, up from 13 percent the previous quarter.
Fairfield-based General Electric Co. was involved in the second-largest deal during the quarter, when it spent $925 million to add women”™s television network Oxygen Media L.L.C. to its NBC Universal division.
Whereas many of the funds raised in 2001 targeted earlier stage investments in hopes of seeding a blockbuster product ”“ with many of those bets failing miserably ”“ today”™s funds are diversified to invest both in startups and mature companies needing money to expand, according to Alex Tan, global manager for private equity content operations at Thomson Financial.
Through the first three quarters of the year, companies developing “clean” energy or environmental technologies were on pace to raise more than $3 billion in capital, easily besting the previous mark of $1.8 billion in 2006.
The Fairfield-based Connecticut Venture Group scheduled its annual venture capital showcase last week in Stamford, which in past years has brought together 300 fund managers, angel investors, limited partners and founders of companies seeking funding.
