Report: R.I. 35th in nation for $1.6M in VC investment in 3Q

CALIFORNIA again led the nation in venture capital investment and deals in the third quarter, according to The MoneyTree Report by PricewaterhouseCoopers based on data from Thomson Reuters. Rhode Island ranked 35th in the nation for $1.6 million in venture capital investment in the third quarter, and 28th for its number of deals at two. / COURTESY THE MONEY TREE REPORT FROM PRICEWATERHOUSE COOPERS/THOMSON REUTERS
CALIFORNIA again led the nation in venture capital investment and deals in the third quarter, according to The MoneyTree Report by PricewaterhouseCoopers based on data from Thomson Reuters. Rhode Island ranked 35th in the nation for $1.6 million in venture capital investment in the third quarter, and 28th for its number of deals at two. / COURTESY THE MONEY TREE REPORT FROM PRICEWATERHOUSE COOPERS/THOMSON REUTERS

PROVIDENCE – Rhode Island ranked 35th in the nation for $1.6 million in venture capital investment in the third quarter, according to The MoneyTree Report by PricewaterhouseCoopers based on data from Thomson Reuters.
The Money Tree Report listed two expansion-stage deals for Rhode Island – $1.5 million to custom athletic apparel SquadLocker Inc. in Warwick from an undisclosed firm and the Slater Technology Fund, and $125,000 to eNow Inc., a Warwick company that offers solar-powered battery-charging and power management solutions, from the Slater Technology Fund.
Rhode Island improved slightly from its second-quarter ranking of 36, even though venture capital investment was higher in the second quarter at $2.1 million and the number of deals also was higher at five. The Ocean State slipped to a ranking of 28th for its number of deals in the second quarter, a decline from No. 26 last quarter.
California again led the nation in venture capital investment at $5.3 billion and deals at 338, while New York was second for deals at 104 and third for investment at $1.3 billion. Massachusetts was second for investment at $1.7 billion and third for deals with 84.
The report said venture capitalists in the United States invested $10.6 billion in 891 deals in the third quarter. Total venture dollars deployed to startup companies for the quarter decreased 32 percent and total deal count fell 11 percent compared with the second quarter, when $15.6 billion was invested in 999 deals.

When comparing the third quarter with the third quarter of 2015, dollars and deals slipped 36 and 25 percent, respectively.

Although this is the 11th consecutive quarter of more than $10 billion in venture capital invested in a single quarter in the nation, it is the second time deal count has dropped below 1,000 since the first quarter in 2013, the report said.

“The decline in venture capital activity this quarter is part of the normalization process that is expected after a quarter in which record-breaking investments dominated headlines,” Tom Ciccolella, U.S. venture capital market leader at PwC, said in a statement. “Despite deal count being the lowest since Q3 2010, quality deals continue to receive funding. The broader ecosystem remains healthy, bolstered by a lift in biotechnology within the top deals and overall, strong fundraising, and a continuation of the trend towards investments in non-traditional industries.”

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There were 10 megadeals (investments of $100 million or more) in total, a drop from 12 in the previous quarter and 27 in the 2015 third quarter.

The software industry again had the most dollars invested among all MoneyTree industries for 28 consecutive quarters, even though it had a 58 percent decrease in dollars and 6 percent decrease in deals compared with the 2016 second quarter. It received $3.7 billion across 372 deals for the quarter. It also had one of the 10 megadeals.

A separate report last week from CB Insights and KPMG International listed three different deals totaling $500,000 for venture capital-backed companies in the third quarter: $250,000 to biomedical company ProThera Biologics; $50,000 to water technology company HMSolution Inc.; and $200,000 to Aquanis LLC, a startup developing a device to improve the efficiency of utility-scale wind turbines. The Slater Technology Fund was responsible for funding all three companies.

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