Venture capitalists and angel investors pumped $72 million into Florida companies during the first quarter of this year, and two-thirds of that flowed into seven South Florida companies, according to the MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association released Friday.
MDLIVE, a Sunrise-based tele-health provider, led the state by drawing $23.6 million in financing from Heritage Group and Karyne Anderson Capital Advisors. Pure Life Renal, a dialysis company in Hollywood, raised $10.5 million, according to the MoneyTree report.
The other South Florida companies, all raising between $1.2 million and $5.6 million according to the report, were Aplicor of Boca Raton, Next University of Miami Beach, 71 Lbs of Fort Lauderdale, Mela Artisans of Boca Raton and Kairos of Miami.
Overall, funding in Florida ventures was up sharply compared to the first quarter of last year, when $20 million was invested, but down sharply from the $132 million raised in the last quarter of 2013.
“Right now we are in the ‘Goldilocks’ phase of the angel-entrepreneur-VC market cycle, meaning we are seeing quality deal flow, solid management teams, truly innovative technologies, and valuations are still reasonable — not too low, not too high,” said Rhys L. Williams, president and co-founder of New World Angels. “This said, we are just now beginning to see the first signs of the next stage in the cycle, where every second person is seeking to get into the act, and where valuations sought by entrepreneurs begin to lose touch with market realities. As long as the IPO [initial public offering] window remains wide open, and the public markets are healthy, we will see continued expansion of the tech economy.”
New World Angels participated in the funding rounds of both Aplicor and Kairos, and Williams said the Boca Raton group had also invested in OBMedical of Gainesville and Bioceptive of New Orleans, which has operations in Deerfield Beach.
Nationally, venture capitalists invested $9.5 billion in 951 deals during the first quarter of 2014. Quarterly VC investment activity rose 12 percent in terms of dollars but fell 14 percent in the number of deals compared to the fourth quarter of 2013, when $8.4 billion was invested in 1,112 deals.
The biggest investments were in San Francisco companies Dropbox, $325 million, and Airbnb, $200 million.
The software industry experienced another significant increase nationally during the first quarter, capturing $4 billion, the highest level since the fourth quarter of 2000, and further distancing it by more than three times from the second-largest industry, biotechnology.
While expansion-stage investments rose, seed-stage investments fell 64 percent in dollars and 41 percent in deals, with $125 million invested in 41 deals during the first quarter. The average size of the deals also fell.
“Seed and early-stage financing numbers are down from the previous quarter, but expansion-stage dollars invested are up 34 percent. This was to be expected when you consider the domination by seed and early-stage deals in 2012 and 2013,” said Bobby Franklin, president and CEO of NVCA. “The spring thaw of the exit markets is providing some firms with new life, but overall capital remains constrained for most venture capital firms.”
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