VC all but disappears in 4th qtr. for county
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In the fourth quarter of 2008, three Fairfield County companies raised a mere $1 million in venture capital funding, down from five companies raising $32 million in the third quarter.
That figure comes from the quarterly MoneyTree report published by the National Venture Capital Association (NVCA) and PricewaterhouseCoopers, based on data from Stamford-based Thomson Reuters.
Of that fourth-quarter total, $750,000 was generated by Westport-based LegiTime Technologies Inc., whose software ensures that SMS messages from employee mobile phones are secure and logged for compliance with any regulations a company faces.
Statewide in the fourth quarter, Connecticut logged just $15 million in total funding for nine companies in all. While that was one-fifth the dollar total of Connecticut”™s total venture capital in the fourth quarter of 2007.
For the year, Connecticut companies registered $127 million in venture capital, fully one- third below the funding received during the high-tech recession of 2002. In a separate report, Dow Jones Venture Wire reported a slightly higher 2008 total for Connecticut at $143 million in venture capital.
The state appeared to get off on better footing early in the first quarter after Rib-X Pharmaceuticals Inc. announced $25 million in new funding. The New Haven-based company develops antibiotics for serious drug-resistant infections. Rib-X investors include Oxford Bioscience Partners, which has an office in Westport.
The record take for Connecticut companies occurred in 2000, when venture capitalists funneled more than $1.5 billion into the state, according to the MoneyTree report.
Nationally, venture investments totaled $5.4 billion across nearly 820 deals, a 26 percent drop in investment dollars from the third quarter of 2008 and the lowest level of activity in nearly four years. Among the few bright spots were investments in clean-energy companies, which increased by half in 2008, and seed-stage investments in newly minted startups. In Connecticut, early stage companies received about one of every five dollars in venture cash in the fourth quarter, after receiving half of all funding in the third quarter.
“The stability of seed and early stage deals as a percentage of total deal volume suggests that venture capitalists are continuing to fund very young companies, giving credence to the philosophy that an economic downturn is a time ripe with opportunity,” said Mark Heesen, NVCA president, in written comments.
In the fourth quarter, the state-backed Connecticut Ventures Inc. of Rocky Hill was the most active investor with five deals for nearly $2 million; San Francisco-based CMEA Ventures funneled the largest single investment via a nearly $10 million tranche for SurgiQuest Inc., an Orange-based maker of devices to help surgeons maintain clear visuals during minimally invasive operations. The company is led by founder Kurt Azarbarzin, who previously worked at the Norwalk-based U.S. Surgical Corp. division of Tyco Healthcare, and at Shelton-based Spinal Wave.