VC deals total $500K in 3Q in R.I.

PROTHERA BIOLOGICS was one of three Rhode Island firms that received funding from the Slater Technology Fund in the third quarter. Pictured is Dr. Yow-Pim Lin, founder of ProThera Biologics. / PBN FILE PHOTO PHOTO/TRACY JENKINS
PROTHERA BIOLOGICS was one of three Rhode Island firms that received funding from the Slater Technology Fund in the third quarter. Pictured is Dr. Yow-Pim Lin, founder of ProThera Biologics. / PBN FILE PHOTO PHOTO/TRACY JENKINS

PROVIDENCE – Rhode Island had three deals totaling $500,000 for venture capital-backed companies in the third quarter, according to CB Insights and KPMG International’s latest “Venture Pulse” report released Thursday.
Biomedical company ProThera Biologics received another $250,000 from the Slater Technology Fund, while Slater invested $50,000 in seed funding to local water technology company HMSolution Inc.
Aquanis LLC, a startup developing a device to improve the efficiency of utility-scale wind turbines, received $200,000 in seed money from the Slater Technology Fund.
The 103-page report examined VC deals worldwide, discovering that VC funding fell to a two-year low in the third quarter, driven by fewer mega-deals totaling more than $100 million.
Asia saw its fourth consecutive quarterly decline in deal volume in the third quarter, while Europe had “robust seed-stage activity.” North America, meanwhile, saw fewer total deals in the period.
In addition, of the quarter’s eight new unicorns, startup companies valued at more than $1 billion, Asia and North America accounted for four each, with none in Europe.
The report said that investors in VC-backed companies “remain cautious” this year, due to economic uncertainty and a difficult exit environment for startup companies.
The third quarter saw $24.1 billion invested across 1,983 deals globally, representing a very slight deal increase from the second quarter, but a 14 percent decline in total quarterly funding. This was the lowest quarter of deal funding since the third quarter of 2014, the report said.
U.S. funding dropped to $14 billion, an 18 percent decrease from the second quarter. Third-quarter deals stood at 1,067.
California funding fell 38 percent from the prior quarter without the second quarter’s “outsize rounds” to unicorns such as Uber, according to the report. However, mega-rounds drove Massachusetts funding 96 percent higher, with deals rising as well, the report said. Massachusetts had 95 deals in the third quarter, compared with 88 in the second quarter, while California had 462 in the third quarter and 479 in the second quarter.

Anand Sanwal, CEO of CB Insights, said, “Before everyone starts saying the sky is falling, it’s worth noting that a bit of sobriety is a good thing. 2015 funding levels were irrationally high, with a new unicorn being birthed every third day as investors were keen to force-feed perceived startup winners with cash. That was not sustainable or healthy. We’re seeing a reset in deal activity and mega-rounds but the levels still remain very high relative to historical levels. A renewed focus on unit economics and sustainability versus growth at all costs is not a bad thing, especially in Asia and North America, as both markets got ahead of themselves. The re-introduction of rationality that we are seeing is positive.”

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