Venture Capital Investment Slides 30% Over Last Week

Capital Hunter was able to verify that $302 million of venture capital was invested in 26 U.S.-based companies during the past week, a 30% drop over the week before. Medical device companies were the most popular targets for investment, garnering nearly a third of the aforementioned $302 million while late stage financing received a disproportionate share of the funding, accounting for over 30% of the week's total investment.

San Diego, CA (PRWEB) February 25, 2006 -- Venture capital investment slipped this period, as only 26 companies received funding, down close to 40% from 43 companies the week before. The $302 million raised by these 26 companies was also down 30% from the week before, the largest week-over-week drop since August. Medical device investment, largely absent the past few weeks, was the most popular sector this period, as 29% of all this weeks dollars were placed in such companies. Industrial & energy related companies continued to do well, as six companies (more than any other sector this week) received over $30 million dollars, fourth highest of any industry.

IPO Activity

Only three companies listed last week, down from fourteen a week ago, part of a slow week for equity investments. The three companies are as follows:

Rosetta Resources (NASDAQ:ROSE), which priced at $950 million, is an independent oil & gas explorer with properties in the Sacramento Basin, South Texas, the Gulf of Mexico and the Rocky Mountains.

Spark Networks (AMEX:LOV), which priced at $236 million, is a provider of online personals services internationally.

Morgans Hotel Group (NASDAQ:MHGC), which priced at $360 million, is an integrated hospitality company that operates, owns, acquires and redevelops boutique hotels throughout the United States and Europe.

Top Venture Investments

The three largest venture deals of the period were:

Insulet Corporation, a medical device company located in Bedford, Massachusetts, raised $50 million in late stage financing from a number of firms, including Orbimed Advisors, The Federated Kaufman Fund, along with existing investors Alta Partners, Pequot Ventures, Prism Venture Partners, Schroeder Ventures Life Sciences, and Versant Ventures.

Moviebeam, a provider of on-demand plug-and-play movie services which just recently became available to most U.S. cities and metro areas, raised $48.5 million in Series A funding from The Walt Disney Company (which incubated Moviebeam), Intel Capital, Cisco Systems, the Mayfield Fund, Norwest Venture Partners and VantagePoint Venture Partners.

Spine Wave, a provider of spinal orthopedic equipment, raised $36.5 million in Series C funding from New Enterprise Associates, Canaan Partners, Morgenthaler Venture Partners, Sprout Capital, Thoma Cressey Equity Partners, CHL Medical Partners and California Technology Partners.

Venture Funding Breakdown

California was the largest recipient of venture capital funding this week. Thirteen California companies raised $146.4 million in new equity financing, which accounted for 48% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into MovieBeam. MovieBeam raised $48 million in Series A financing and is a provider of on-demand plug-an-play movies.

The medical device sector raised the most venture capital this reporting period, with three companies raising $91.5 million in venture financing, which accounted for 29% of the venture capital this period. The largest private venture financing in the medical device sector this period was invested into Insulet Corporation. Insulet Corporation raised $50 million in late-stage financing from a consortium of private equity and venture capital firms and is a provider of disposable insulin delivery systems for the treatment of diabetes.

Start-ups raising their late stage round of financing represented the largest share of the funding pie, as 33% of all money invested this period went into such companies. The largest late stage financing was placed into the aforementioned Insulet Corporation.

Summary

A total of 69 equity financings of private and public companies occurred during this reporting period. Each of the 69 equity financings are profiled in a weekly (in this case biweekly) report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.

About CapitalHunter.com

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