U.S. venture capitalists maintained a robust pace in the third quarter, pouring the bulk of their dollars into later-stage deals and putting 2007 on pace to reach the highest funding levels since 2001, according to two new surveys released Saturday.
The surveys, one from PricewaterhouseCoopers and the National Venture Capital Association, based on Thomson Financial data, and the other from Dow Jones VentureOne and Ernst & Young, differed on total funding figures and deal numbers but documented similar trends.
The MoneyTree Report from PWC and the NVCA reported $7.1 billion invested in 887 deals, a slight downtick from the $7.2 billion for 1,000 deals in the second quarter.
Meanwhile, Dow Jones VentureOne counted more than 200 fewer deals—635—but about $1 billion more in funding at $8.1 billion, 8 percent more than the $7.5 billion reported in the second quarter.
Still, both surveys put the year on pace to raise the most venture capital in six years.
“Two thousand and seven is on track to register the biggest year for VC investments since 2001,” Matthew Toole, Thomson Financial’s research director, private equity, said in a conference call.
Sunil Dhaliwal, a general partner at Waltham, Massachusetts-based Battery Ventures, said clean tech is attracting new investors.
“A lot of firms that haven’t done clean-tech in the past are trying to figure out how they are going to get involved in the sector,” he said. “You’re seeing a lot of first time investors there.”
Clean tech, which cuts across several traditional industry classifications, attracted $844 million, 80 percent more than in the second quarter, MoneyTree reported. Venture One’s energy group, where many clean tech companies are classified, similarly posted an 83 percent funding increase to $590.2 million for the quarter.
Though clean tech showed the strongest growth, information technology and life sciences remained the staples of VC portfolios, attracting $3.7 billion and $2 billion, respectively. The largest chunks went to software companies and biotechnology firms, both getting about $1.1 billion, MoneyTree said.
But the quarter’s biggest deal went to a medical device company. Audubon, Pennsylvania-based Globus Medical, a maker of devices used in spine surgery, got a $110 million round from Clarus Ventures, Goldman Sachs, and SunAmerica Ventures, the largest infusion for a medical device company ever recorded by MoneyTree.
The quarter’s other $100-million deal went to GreatPoint Energy, a Cambridge, Massachusetts, company that converts coal and biomass into natural gas. Joining in that deal were Advanced Technology Ventures, Dow Chemical Company, Draper Fisher Jurvetson, Khosla Ventures, and Kleiner Perkins Caufield & Byers.
Later stage deals drew $3.0 billion in 288 deals, accounting for about 42 percent of total third-quarter funding, according to MoneyTree. That compared with $1.4 billion for seed and early stage investments and $2.7 billion for expansion-stage deals.
Menlo Ventures took the title as the quarter’s most active VC firm in the San Francisco Bay area with 11 deals. That firm was followed by Sequoia Capital (eight), VantagePoint Venture Partners, New Enterprise Associates, and Kleiner Perkins Caufield & Byers (all with seven), and five firms tied with six, U.S. Venture Partners, Mayfield, Khosla Ventures, Foundation Capital, and Duff Ackerman & Goodrich.
The Bay Area remained the center of U.S. venture capital, drawing $2.52 billion, slightly more than the $2.49 billion in the prior quarter, according to MoneyTree. The Northeast, including New York, New Jersey, Connecticut, and the Boston area, ticked up to $1.5 billion from $1.4 billion. The Pacific Southwest, including Arizona, Colorado, and the Southern California regions of Los Angeles, Orange County, and San Diego, posted a dip in funding to $1.2 billion versus $1.3 billion in the second quarter.
Surveys can reach different tallies based on the response rate, whether deals are classified as venture capital or buyouts and whether the report tallies funding commitments or actual investments.