Venture capital funding surges in D-FW area

Venture capital funding surges in D-FW area

on April 14, 2014

By hanah Cho

hcho@dallasnews.com

Published: 18 October 2013 12:08 AM
Updated: 18 October 2013 12:45 PM

North Texas startups and young companies attracted more venture capital funding in the third quarter than all of last year.

Venture capitalists committed $137.4 million to 12 Dallas-area deals during the June-September period, more than triple the $43.2 million invested in 10 startups a year ago, according to the MoneyTree report released Friday by PricewaterhouseCoopers LLP and the National Venture Capital Association. The report is based on data provided by Thomson Reuters.

In contrast, venture investments in 2012 totaled $116.8 million, the lowest funding level since MoneyTree began aggregating data in 1995.

The major funding uptick in the third quarter was a positive sign for the region, which has seen a steady decline in venture capital. Entrepreneurs and investors have noted recently the increase in deal flow as well as investment activity in the region.

“We’re certainly hearing the buzz,” said Cindi Keith, a partner at PricewaterhouseCoopers’ technology practice in Dallas. “It’s nice to see the numbers.”

Keith said Dallas-area deals in the third quarter were spread across numerous industries and did not include any one-time mega deals that have boosted investments to unusually high levels. The first quarter, for instance, included a $343.5 million investment.

“It’s not a quarter where we had a $300 million deal out there that made it look better than it was,” she said.

Statewide, investors poured $239.2 million into 35 deals in the third quarter, compared with $142.6 million in 38 deals in the same period last year.

Dallas captured the top spot, followed by Austin and Houston.

Venture capital investment also rose nationally. Investors committed $7.8 billion in 1,005 deals in the third quarter, compared with $6.6 billion in 937 deals in the same period last year.

Software attracted the most money and deals in Texas, Dallas and nationally.

Three Dallas-area companies claimed the top three investment deals in Texas.

Irving-based MedSynergies attracted $65 million from Catholic Health Initiatives, which acquired a significant minority stake in the hospital management services company.

MedSynergies said it plans to use the investment to fund its future growth and support its joint venture with Catholic Health Initiatives. MedSynergies provides management and administrative services for doctors affiliated with large hospital systems.

MedSynergies’ deal was also the 10th-largest deal nationally, according to the MoneyTree report.

ZeOmega in Frisco came in second in Texas with a $21.5 million investment, while ZS Pharma in Coppell secured $15 million.

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Venture capital deals in North Texas
MedSynergies Inc. Irving Software $65 million
ZeOmega Inc. Frisco Software $21.5 million
ZS Pharma Inc. Coppell Biotechnology $15.1 million
Geoforce Inc. Coppell Software $11 million
PureDiscovery Corp. Dallas Software $10 million
Phytel Inc. Dallas Software $5 million
Micro-Transponder Inc. Dallas Medical devices and equipment $3.39 million
Netsocket Inc. Plano Software $3 million
Oculus 360 Frisco IT services $1.5 million
Horizon Data Center Solutions LLC Plano IT services $1 million
Vital Art and Science Inc. Richardson Software $550,000
Koupon Media Inc. Frisco Media and entertainment $400,000
SOURCE: PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report
 
 
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