Top Ten Venture Deals Highlight Online Services, Healthcare


Second-quarter venture investing showed a modest 15 percent rebound from the depths of the dismal first quarter. But it was no great shakes.

Investments were still down 51 percent from a year ago, and there were no obvious signs of a coming uptick in spending.

In this environment, the top ten deals of the quarter reflected a restrained level of optimism about healthcare investing (now that the Obama Administration has raised hopes of healthcare reform) and online service delivery. These are themes are likely to continue in the months ahead, even if the negative cast of the industry remains.

The top deal of the quarter, according to the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters, went to biotech firm Clovis Oncology of Boulder, CO, which raised $140 million. The company is working on anti-cancer drugs.

Three other healthcare transactions made the list: Hyperion Therapeutics of South San Francisco; PhotoThera of Carlsbad; and Cempra Pharmaceuticals of Chapel Hill, NC. Hyperion took in $60 million, PhotoThera, $50 million and Cempra, $46 million.

Companies developing software or online services were led by Workday of Pleasanton, which raised $75 million from Greylock Partners and New Enterprise Associates. The company develops software delivered as a service to human resources departments.

ExactTarget of Indianapolis raised almost $70 million and Revolution Money of St Petersburg, FL, took in $42 million. Security services company LifeLock of Tempe, AZ, raised about $40 million.

Also on the top ten list as well were Phoenix Services of Unionville, PA, and Fusion-io of Salt Lake City.

It is not surprising to see VCs pour buckets of money into later stage and expansion deals since the nation’s public markets refuse. (Most of the IT deals on the list fell into this category.) The question is whether there will be big paydays for some of these more mature companies.

My bet is there could be, but not until more sustained optimism returns to Wall Street.