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MoneyTree Report: Florida firms get only tiny slice of venture capital pie

South Florida took the lion’s share of the $104 million venture capitalists invested in Florida companies in the third quarter of 2013, according to the MoneyTree Report released Friday by PricewaterhouseCoopers and the National Venture Capital Association.

Investments in YellowPepper and Modernizing Medicine, both in the software space, along with InnFocus, a Miami medical device maker, led the deals in South Florida companies. Together the eight deals in South Florida companies totaled $71.71 million, according to the report, which was based on Thomson Reuters research.

Another trend: Healthcare-related companies took most of Florida’s share of VC funding.

More than $78 million went into Florida healthcare-related companies, including biotech, medical device makers and healthcare-related software solutions. Companies in South Florida, an emerging healthcare-tech hub, secured nearly half of the state’s take.

In Florida, the $104 million invested in 12 deals is down from the second quarter total of $156 million but is up 261 percent from a year ago, when $28.83 million went into 10 Florida companies. Year-to-date, the $277 million in venture funding in Florida is up 75 percent over the first three quarters of last year.

Yet Florida companies still take only a tiny fraction — 1.3 percent — of the U.S. venture capital pie. Venture capitalists invested $7.8 billion in 1,005 deals in the third quarter across the country, with California as usual leading the pack. The $258 million investment in Silicon Valley on-demand car service Uber, led by Google Ventures, dwarfed the total investment in Florida, Georgia and all their neighbors combined.

Nationally and in Florida, most of the deals were in the software space. Across the U.S., the software industry received the highest level of funding in the third quarter, exceeding the $3 billion mark for the first time in 12 years with $3.6 billion flowing into the sector. “At the current pace of investing, we should see total venture capital investments in 2013 exceed the annual total from 2012,” said Mark McCaffrey, global technology partner and software leader at PwC US.

That seed/early stage deals accounted for 58 percent of total deal volume in Q3 is an indicator of optimism.

“We are balancing this optimism, however, against the recognition that VCs are still trying to gain exits for the previous generation of companies. There is some improvement on that front, but we would like to see it strengthen even further,” said John Taylor, head of research at the NVCA.

MoneyTree Report results are available online at www.pwcmoneytree.com and www.nvca.org.

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FUNDED IN 3RD QUARTER

Here is a list of South Florida companies that received funding in the 3rd quarter, according to the MoneyTree Report:

YellowPepper: $15 million

Modernizing Medicine: $14 million

InnFocus: $13.51 million

TissueTech: $10 million

CareCloud: $9.34 million

SafetyPay: $7 million

VirtualWorks: $2.52 million

Cohealo: $350,000

Other Florida companies:

Lensar: $16.25 million

Vestagen Technical Textiles: $8.25 million

BCR Electronics: $6 million

SiteWit: $1.42 million

Posted Oct. 18, 2013

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