Report: Venture capital deals in the Washington region strong in third quarter

October 18, 2013

Investors are pouring venture capital dollars into the Washington region at a pace not seen in more than a decade.

Companies across the Washington region have attracted $1.15 billion in the first three quarters of the year, more money than the first three quarters of any year since 2001.

That includes $445.7 million brought into the region during the third quarter alone, an increase of 106 percent compared to the $216.2 million raised during the same period last year.

The figures were disclosed in a quarterly report from PricewaterhouseCoopers and the National Venture Capital Association. Thomson Reuters provided the data.

The report defines the Washington region as Maryland, Virginia, West Virginia and the District, though the list that appears in Capital Business strips out any deals outside D.C. and its immediate suburbs.

Arlington-based software company Evolent Health collected $100 million, the largest sum in the region. Reston-based Clarabridge ranked second with an $80 million investment.

Both deals were large enough to rank among the top 10 in the country for the third quarter.

The rise in venture capital deals comes at a time when the stock market has been up and an increasing number of companies are pursuing initial public offerings. Investors are more likely to cut investment checks when they’re confident they will be able to recoup the money down the road.

Brad Phillips, the director of emerging company services at PricewaterhouseCoopers, said the third quarter marked the first time since 2004 that more than 20 venture-backed companies went public two quarters in a row.

“With the IPO market so robust, VCs want to get in early so they don’t get locked out of a deal, and they can see the upside on investment,” Phillips said.

What’s more, venture capitalists had more success raising money from their limited partners in the third quarter, meaning they have money to float future deals.

“The signs are very positive,” Phillips said.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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