The Washington Post

Venture capital report: Washington area firms raise $215.7M in third quarter

Local firms collected more investment dollars in the third quarter compared to earlier this year, a report released last week shows, but the figures are weaker than those posted at other points during the economic recovery.

Companies across the region raised a combined $215.7 million for the third quarter, a 12 percent decline compared with the $245.7 million raised in the same quarter last year.

The number of total investments, however, climbed to 47 in the third quarter of this year compared with 36 deals during the same three-month period of 2011.

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

The report defines the Washington metropolitan region as Maryland, Virginia, West Virginia and the District. The list that appears in Capital Business strips out those firms beyond D.C. and its surrounding suburbs.

Software continued to claim the vast majority of both investment deals and dollars compared to other sectors. In the third quarter, 22 software firms collected a combined $156.4 million.

The medical devices and equipment sector finished at a distant second with two deals worth $34.4 million, followed by biotechnology with six deals worth $17.3 million.

Columbia-based Tenable Network Security, which monitors and protects digital networks, led in investment dollars, collecting $50 million in a round led by Accel Partners.

Telcare, a Bethesda-based maker of blood glucose meters, and Silver Spring software development firm Sonatype were nearly tied for second place, raising $25.4 and $25 million, respectively.

Among the most compelling statistics in the report shows 30 of the 47 deals during the quarter were made with seed and early stage companies. That often signals investors have more confidence in the economic outlook and are willing to hedge riskier financial bets on young ventures.

Investments have been climbing on an annual basis since 2010, but have yet to return to their pre-recession levels.

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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