Local venture-backed financings rise in first half of 2008

NEW YORK – Rhode Island venture-backed financings increased in the first six months of this year, with four local companies raising investments totaling $48.27 million, according to the Quarterly U.S. Venture Capital Report released recently by Dow Jones VentureSource.
In comparison, there was only one venture capital deal valued at $2.68 million in the first six months of 2007, according to figures included with the venture capital report.
In the second quarter of 2008 alone, three Rhode Island companies raised investments with a total value of $37.25 million.
Meanwhile, venture capital investment in U.S. companies for the second quarter slipped below the $7 billion mark for the first time in 18 months, according to the quarterly report.
Investment nationwide fell 12 percent in the second quarter compared with the same period last year with $6.64 billion put into 602 deals, the lowest quarterly deal count since 2005. The $7.58 billion invested in second quarter of 2007 was the second-highest quarterly total recorded since the end of the dot-com boom in 2001, Dow Jones VentureSource said.
“While the U.S. investment total is down compared to last year’s impressive second quarter, we still saw steady deal activity and investment in the first half of the year, which is encouraging,” said Jessica Canning, director of global research for Dow Jones VentureSource. “Venture capitalists commonly take the long-view when it comes to investing. While IPOs and acquisitions may be rare now, VCs aren’t concerned about that.
“They’re focusing on what’s next – and that’s reflected in the healthy early stage investment we’re seeing in areas like renewable energy, information services and business support services.”
In New England, the value of venture financings declined 22.45 percent in the second quarter to $713.85 million compared with the year-ago period’s $920.55 million. The number of investment also declined year-over-year from 110 to 76 in the second quarter, a 30.91-percent drop.