Venture Capital Investments in NYC Skyrockets 40%

When startups think of VC investments they’re first reaction is not typically “New York City”, unless it’s Financial Services and Wall Street related. Well, New York is known for its Financial Services technology & innovation, however now seems to be diversifying into biotechnology.

My curiosity was first peaked when NYC based Medidata Clinical Trails Software-As-A-Service (SaaS) .NET Microsoft pure-play ISV backed by InsightPartners wins several local & national awards. I was thinking – OK, New Jersey has a ton of Fortune 100 Pharmaceuticals companies; therefore it’s somewhat normal for a few biotech investments.

From a few to a trend - biotech takes in 1/3 of investment pool.  According to Amanda Fung report in Crain's New York investment trend: "Venture capital firms invested $535.5M in 58 New York metro tech companies in the second quarter, up 40% from the previous year, according to a recent quarterly survey released Tuesday, August 1st 2006”            ... She continues “About a third of the New York funding, of which $175 million, went into 11 biotechnology companies, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association”...

"'New York Metro's second quarter has a terrific story to tell,' said David Silverman, managing partner of PWC's venture capital practice in a statement. ’To see this pace continue will only confirm the venture capital commitment to this region.'"

Investments in New York City’s early stage companies increased for the third consecutive year to $91.3M, up 55% from the previous quarter, and later stage companies were up for the fourth year to $214M, up 44% from the previous quarter.

Highlights include 4 NY Metro companies within business products and services received $96M, one of which received $47.5M. While 17 software companies took in $70 million, and 3 IT services companies took in $46M. Overall, New York Metro Investing Increased a Healthy $18M over Q4 2005 In Q1 2006 with $348M to view the full press release link to; http://www.nysia.org/member_press/pressrelease.cfm?pid=297

Nationally, venture capital investing reached its highest level since 2002 with $6.3 billion in 865 companies for the quarter, according to the survey. First-time financings reached a five-year high of $1.3 billion in 282 companies. PWC Money Tree shows investment by location nationally: http://www.pwcmoneytree.com/moneytree/nav.jsp?page=region

Cheers to the City that never sleeps – New York, New York!

Don.

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