Venture capital money up, number of deals down in Q2
Courtesy / PricewaterhouseCoopers
PricewaterhouseCoopers partner Greg Vlahos said the amount of money venture capitalists invested in the second quarter is up, but the number of deals is down because of the large deal size. He said Maine is on track to have its average of three to five deals for the full year.
Funding to venture capital-backed companies in the United States rose to its highest level in a year, though Maine only had one deal, according to the second-quarter figures released today in the MoneyTree Report from PricewaterhouseCoopers LLP and CB Insights.
“There was $18.4 billion invested in 1,152 deals,” PwC partner Greg Vlahos told Mainebiz in a phone interview. That’s up 27% in value but down 4% in the number of deals.
As in previous quarters, deals were driven by multi-million-dollar mega deals. Of the Top 25 investments by dollar, 14 were in California, primarily in the San Francisco area and Silicon Valley. Vlahos said of the $18.4 billion, 31 deals topped $100 million.
New England was lower than average for the quarter with $1.4 billion invested versus a high of $2.2 billion in the second quarter of 2015. The average deal size in New England in this year’s second quarter was $13.3 million, which Vlahos said means a lot of large money still is going into deals in the region.
While seed-stage investments were 22% of the total, an eight-quarter low, there’s good news in that money still is going toward those small companies, Vlahos said.
The only deal listed in Maine in the quarter was $250,000 invested in NBT Solutions, a Portland information technology and geographic information system company.
The company in late June tried to raise $1 million in equity, but the methodology used by PwC only counts a certain type of venture capitalist in the $250,000 it listed for the company, said John Burns, managing director of the Maine Venture Fund in Newport.
“We led the round, but PwC doesn’t include us in their numbers,” he said. Other investors were CEI, Bangor Angels and Maine Angels. He said the $250,000 likely represents CEI’s investment, as CEI Ventures is a for-profit company.
“We closed the round in early June with $800,000,” Burns said. NBT is trying to raise the remaining $200,000 until December, he said.
MVF has done well with a record number of exits in its fiscal year ended June 30. The four companies from which it closed its investment are Coast of Maine Organic Products, InterSpec, Look’s Gourmet Food and most recently Certify. MVF invested $500,000 in Certify in two funding rounds, and got more than a five times return on investment, Burns told Mainebiz at the time.
PwC’s Vlahos also said initial public offerings are slowly increasing, with 16 in the second quarter compared to 12 in the first quarter. Mergers and acquisitions were down to 124 nationwide from 39 in the first quarter of this year.
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