Bay State Startups Bring in $192M in December, Industrial Companies Squeeze Healthcare Sector Out of the Top Fundraising Spot

[Corrected 1/25/11, 12:40 pm. See below.]Good news and bad news for the state’s startups when it comes to dollars raised last month. Tech and life sciences firms overall collected a bigger chunk of change than the month before, but the healthcare sector, which typically leads the pack, yielded the top spot to the industrial sector. In total, the state’s tech and life sciences firms raised $192.3 million across 29 equity-based deals, according to our data partner CB Insights’ FundingFlash, a daily roundup of companies receiving venture capital, angel investment and growth equity funding. The December startup funding swelled by about 10 percent from November’s total, when Massachusetts startups collected $174.7 million across 37 deals.

Of that December pot, four healthcare companies took in $47.8 million in funding. It may not sound like anything to sneeze at, but those numbers pushed the healthcare sector (which includes biotech, med devices, and wellness companies) out of the lead it had been enjoying in the majority of 2010’s monthly deals lists. And it’s a huge drop from November, when life sciences companies brought in $74.1 million in 10 deals.

Companies in the industrial technology space edged ahead of healthcare startups in December by just $500,000, raising $48.3 million across four deals. And the Internet sector followed closely at healthcare’s heels, with $45.1 million raised across eight deals. So that means healthcare deals accounted for just one quarter of the investor dollars that Massachusetts startups raised last month, when much of last year they had been enjoying a share of at least about 40 percent.

The sector results for December followed much of the same patterns as the overall VC data for fourth quarter of 2010, much of which came out last week. As Xconomist Michael Greeley discussed yesterday, the industrial sector soared while the biotech and med devices space faltered last quarter, when it came to venture dollars raised.

Helping the industrial sector pull ahead was Cambridge, MA-based Rive Technology, which

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Author: Erin Kutz

Erin Kutz has a background in covering business, politics and general news. She holds a bachelor’s degree in journalism from Boston University. Erin previously worked in the Boston bureau of Reuters, where she wrote articles on the investment management and mutual fund industries. While in college, she researched for USA Today reporter Jayne O’Donnell’s book, Gen Buy: How Tweens, Teens and Twenty-Somethings Are Revolutionizing Retail. She also spent a semester in Washington, DC, reporting Capitol Hill stories as a correspondent for two Connecticut newspapers and interning in the Money section of USA Today, where she assisted with coverage on the retail and small business beats. Erin got her first taste of reporting at Boston University’s independent student newspaper, as a city section reporter and fact checker and editor of the paper’s weekly business section.