Southern California Venture Investments See Big Drop In Q1

Venture capital investments saw a sharp drop in Q1 in Southern California, according to the latest venture numbers from the MoneyTree report. The report, released by PricewaterhouseCoopers and the National Venture Capital Association over the weekend, tallied up $534.3M invested in 81 deals in the Southern California region in Q1 of 2013, down from Q4, when there was $674.2M invested in 95 deals, and dramatically down from the nearly $959M and 96 deals in Q1 of 2012. That's a 44 percent drop year-to-year for deals in Q1. The drop reflected a national drop in venture capital deals and volume. Nationally, venture capital investment was 12 percent in terms of dollars and 15 percent in the number of deals, totalling only $5.9 billion in 863 deals.

The local drop in investment was across the board. The Los Angeles area was down to just $206.0M in 42 deals, well below Q1 of last year, when $325.7M was invested in 55 deals. Orange County also was down, racking up $158.9M across 13 deals, down from $250.8M in 15 deals last year in the same quarter. San Diego had $178.3M in 26 deals, also down compared to the $382.5M and 26 deals a year ago.

The largest funding round was for PICS Auditing, which provides screening of contractors, which is in Irvine; the firm raised $35M in funding. Laguna Hills-based Glaukos was the second largest round, with nearly $30M raised in the quarter. Goleta-based BAROnova raised $27.3M for its medical devices.

In terms of industries, Software was the most popular investment area for Southern California, with $177.3M raised in the quarter; that was followed by Medical Devices ($116.24M), then Biotechnology companies ($109.31M).

Finally, looking at venture capital investors, the most active investors in the region were Siemer Ventures (10 investments); Correlation Ventures (8); Qualcomm Ventures (7), and Avalon Ventures (5). As in prior quarters, the most active investors from Southern California were, for the most part, not the same as the list of most active investors in the Southern California market. The most active investors there were Siemer Ventures (6 investments in Southern California), Kleiner Perkins Caufield & Byers (4), Qualcomm Ventures (3), and US Venture Partners (3).

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