San Diego Bucks U.S. Trend in VC Funding, & Top 20 Area Deals

In contrast to the trend nationwide, more than two-thirds of the venture capital deployed in San Diego during the third quarter went into life sciences startups, according to data released today as part of the MoneyTree Report.

Venture funding for life sciences startups has been shrinking nationally, while software is booming. VC firms invested almost $3.6 billion in U.S. software companies during the three months that ended Sept. 30, according to the MoneyTree Report. That was the highest funding level for software in 12 years, and was more than 46 percent of the $7.8 billion that VCs invested nationwide during the third quarter. The software industry also counted the most deals—420—of any sector, and nine of the 11 largest investments during the quarter went to software companies.

In the San Diego area, venture capitalists invested about $214.3 million in 29 deals during the third quarter, according to MoneyTree data. The amount invested was about 19 percent higher than the $179.3 million that VCs invested in 19 San Diego companies during the previous quarter. But it was down nearly 15 percent from the $252 million that VCs put into 21 startups during in the third quarter of 2012.

More than two-thirds of San Diego’s total, or $144 million, went to life sciences companies, and 19 of the 29 deals, or almost two-thirds of the deal count, went to life sciences companies.

“San Diego has been a leading life sciences hub for 25 years and is known for this,” said Jay Lichter of San Diego’s Avalon Ventures. “San Diego is not really known as

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.