Connecticut venture funding continued its upward climb in the third quarter, although the pace of growth slowed significantly during the summer months.
Still, venture funding for the year has already reached its highest levels in more than a decade, as investors are pouring more cash into Connecticut companies.
Venture capitalists injected $69.9 million in Connecticut companies in the third quarter, up from $68 million a year earlier. That was the highest level of third quarter investment since 2000, according to the latest MoneyTree report, a joint effort of PricewaterhouseCoopers and the National Venture Capital Association (NVCA).
Overall, 11 Connecticut companies received funding in the third quarter, but the bulk of the venture capital went into four deals.
Danbury’s Odyssey Logistics & Technology Corp. was the breadwinner, raking in about $40 million from several investors including Boston Millennia Partners, CMEA Development Co., and Trident Capital.
New Haven’s Continuity Control, which offers compliance management systems for community banks and credit unions, raised $10 million, while Norwalk’s etouches, a maker of web-based event management software, raised $6.4 million.
Greater Hartford companies were included in only two deals. Avon-based iDevices collected $5 million from investors, while Farmington’s Innovatient Solutions raised $200,000.
Nationwide, venture capitalists invested $9.9 billion in 1,023 deals in the third quarter, a 14 percent decrease in dollars and a 9 percent decrease in deals over the prior year. However, for the first three quarters of 2014, U.S. venture funding totaled $33 billion, which is more than was invested in all of 2013.
Connecticut’s total venture funding through the first three quarters of this year — $385.9 million — is well ahead of last year’s full-year investment total of $212.5 million.
This year’s venture funding uptick is largely a result of a “strong IPO market for venture-backed companies and the rise of startups in every region across the country,” said Bobby Franklin, president and CEO of NVCA.
“The emergence of non-traditional investors, including hedge funds and mutual funds, is contributing to the increase in venture investing this year,” Franklin said. “Another factor that can’t be ignored is the changing nature of our economy, where startup companies are disrupting entrenched industries and, in some cases, creating new industries altogether. Traditional and non-traditional venture investors alike recognize this and want to get in on the ground floor of innovation.”
Across the country, investors continue to be most bullish on software companies, which received $3.7 billion in the third quarter, the highest funding of any industry. In Connecticut, biotechnology companies have received the most funding this year, raking in $207 million.
