San Diego startups pulled in the largest amount of venture capital in the June quarter since the tech bubble of the early 2000s, fueled by investments in biotech/health care companies.
Two reports this week that track venture capital investment – MoneyTree and Dow Jones VentureSource — showed a strong quarter locally and nationally. The numbers varied between surveys, but the trend of increased funding for startups was similar.
The gains are being driven by continued economic growth, an active market for initial public stock offerings and venture capital funds having plenty of money to invest in young firms.
“Clearly, there is liquidity out there,” said Eric Hornsten, a San Diego partner at PricewaterhouseCoopers, which is involved in the MoneyTree report along with CB Insights. “There are dollars to invest, and the IPO market is providing some level of back-end liquidity, as well, which is contributing to the optimism.”
In San Diego, 34 startups raised $590 million in the second quarter of 2018, according to the MoneyTree survey. That’s the largest amount raised in a single quarter locally since the first quarter of 2001.
The fundraising by startups was broad-based, with no single mega-deal skewing San Diego’s numbers upward as is sometimes the case when there’s a large quarter locally.
“Eight of the top 10 deals were in excess of $25 million,” Hornsten said.
Dow Jones VentureSource pegged the amount of venture capital raised by San Diego startups even higher for the quarter – with 29 firms corralling $706 million.
“There is a lot of money that has been raised” by venture capital firms nationwide, said Jeff Grabow, a Silicon Valley-based venture capital leader for E&Y, which is associated with the VentureSource report. “If you take a look at the first half of the year, there was $26 billion