Venture funding in Connecticut nosedived during the first quarter despite more dealmakers getting into the action, a sign that investors still remain skittish about dumping large sums of capital into startup companies.
In all, investors injected about $56.3 million into Connecticut companies during the first quarter of 2011, a 57 percent decrease from the $131 million invested in the year-ago period.
That sum represents 23 deals, compared to 14 deals a year ago, according to the latest MoneyTree report, a joint effort of PricewaterhouseCoopers and the National Venture Capital Association.
The data was provided by Thomson Reuters.
Nationwide, venture capitalists invested $5.9 billion in 736 deals in the first quarter of 2011. Quarterly investment activity increased 5 percent in terms of dollars but fell 11 percent in number of deals compared to the fourth quarter of 2010 when $5.6 billion was invested in 827 deals.
The national quarterly deal count represents the lowest number of deals in a single quarter since the third quarter of 2009.
New Haven antibiotics developer Rib-X Pharmaceuticals Inc. scored the biggest Connecticut deal, getting $20 million from a consortium of investors including Connecticut Innovations and New York investment firm Warburg Pincus.
Rib-X was founded in 2001 by Yale University colleagues Peter Moore, William Jorgensen and Thomas Steitz, winner of a portion of the 2009 Nobel Prize in Chemistry for his work describing the structure and function of the ribosome.
SurgiQuest Inc. of Orange also scored nearly $20 million from at least four different investors. The bioscience company develops and manufactures technology for minimally invasive surgery. Its investors included Aphelion Capital, CMEA Capital, Fletcher Spaght Associates, and River Cities Capital Funds.
Among the Greater Hartford companies that got a piece of the action was Bloomfield combustion engine developer LiquidPiston Inc., which received $2.2 million for expansion. The company is developing internal combustion engines based on an innovative thermodynamic cycle that increases the average efficiency over conventional diesel engines by up to 50 percent under typical operating modes. The engines are also a quarter of the size of comparable engines and up to three times more fuel efficient.
Two Farmington-based companies were involved in smaller deals. Pharmaceutical company AlloStem Therapeutics received $75,000, while Alphachromics Inc., a spinout from the University of Connecticut that produces color-changing conductive polymers, received $40,000.
In Connecticut, the biotechnology sector saw the most funding in the quarter — $20.2 million — spurred by the Rib-X Pharmaceuticals deal. Medical devices, software, retailing/distribution, and energy/industrial received the next largest chunks of cash, raking in $20.19 million, $7.1 million, $4 million, and $3.1 million respectively.
Three other industries —retailing and distribution, media and entertainment, and telecommunications — also received funding.
Nationally, the software industry received the highest level of funding for all industries with $1.1 billion invested during the first quarter of 2011. The software industry also had the most deals completed in the first quarter with 187 rounds.
In terms of dollars invested, the biotechnology sector was in third place, rising 6 percent from the prior quarter to $784 million in the first quarter of 2011.
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Farmington Bank opens branch
Farmington Bank recently opened its second West Hartford branch and its 16th branch overall. The bank’s new real estate is located in the Elmwood Plaza at 176 Newington Rd.
Todd Bower, a vice president of Farmington Bank, is the branch manager.
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TD Bank expands
TD Bank has opened a regional office in Wilton that will serve as a centralized hub for the bank’s commercial and middle-market banking groups, including team members from asset-based lending, cash management and government banking.
The office will house 35 employees and also feature reps from TD wealth management, financial services and marketing.
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Greg Bordonaro writes the Financial Sense column every other week. Reach him at gbordonaro@HartfordBusiness.com.
