Venture capital report: Investment in local firms tops $200M in first quarter

The Washington region began the year with a nearly identical amount of venture capital investment in terms of the number and size of deals compared with the first quarter of 2011.

Forty deals worth $202.5 million were inked across Maryland, Virginia, West Virginia and the District during the first three months of the year. That’s an almost-indistinguishable increase in dollars of 0.7 percent over the same quarter in 2011, when $201 million was raised in the same number of deals.

Later-stage investments dominated the quarter with 16 deals completed. Those investments, which tend to be larger sums of money, also accounted for half of all dollars raised in the quarter.

The figures were released last week in a quarterly report published by PricewaterhouseCoopers and the National Venture Capital Association. Thomson Reuters provided the data.

While market observers say it’s difficult to glean a meaningful trend from one quarter’s data, the numbers suggest the year is off to a solid start. Investors in particular are feeling more confident about the ability to recoup their investments through public offerings and acquisitions as the economy gains momentum.

“That does take an enormous amount of pressure off the top end,” said Julia Spicer, executive director of the Mid-Atlantic Venture Association. “If you’ve got the combination of a healthy M&A market and a healthier IPO market, that’s a good thing because there is a place for these companies to go.”

Investments in the region have been rebuilding fairly consistently since 2009, when the depths of the recession pushed them to their lowest level in a decade. Updated figures show local firms raised $1 billion in 166 deals last year.

Excluding firms outside of the immediate D.C. area, Landover-based 2tor cashed the largest check at $26 million to expand the online degree programs it creates in tandem with brick-and-mortar universities. Other sizeable deals were inked by online advertising analytics company Resonate Networks ($22.5 million) and digital publisher Vox Media ($14.5 million).

Steven Overly is a national reporter covering federal technology and energy policy with a focus on Capitol Hill. He previously covered the business of technology, biotechnology and venture capital.
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