Prepared by Capital Hunter analysts
Venture capital investment, which rose sharply last week, declined almost as sharply this period, as companies barely registered $300 million, a week-over-week drop of nearly 45%. Unlike last week, where there were eleven companies that received an investment of over $20 million, only three companies qualified for such an honor this week. In fact, if it weren’t for the $75 million investment Salick Cardiovascular Centers received from Warburg Pincus, this period would have been the quietest week of funding since the Fourth of July last year. Of the 37 companies that received funding, ten of them received less than $2 million and thirty received less than $11 million. However, there is a potential silver lining to this story, as it suggests that some of the cash private equity firms have been piling up is starting to trickle down to (very) early stage companies. Magen Biosciences, a biotechnology company currently developing therapeutics to treat various skin disorders, received a $2.3 million Series A investment from ARCH Venture Partners, Venrock Associates and TVM Capital. Another company, Sonopia, a technology firm that is currently developing methods to segment mobile market traffic, raised $2.3 million in Series A funding from ComVentures and Sevin Rosen Funds and could receive more as the product development progresses (the $2.3 million in part of a larger $8.9 million round of funding) to completion. There were also some seed financings that took place, however most of these were either done by angel investors or government agencies. Whether this is part of a new trend or a funding anomaly is something that we will keep an eye on throughout the coming month ahead.
IPO activity, after languishing the past few weeks, picked up some steam as seven companies had newly minted shares to offer to the public this week. Of these seven companies, three of them are related to the financial services industry, the largest such bunch of companies in many months. The biggest draw, however, was for Tim Horton’s, a Canadian restaurant chain well known for its coffee and doughnut holes (called Timbits) that pulled in well over a half billion dollars. The seven companies are as follows:
Nextest Systems NASDAQ:NEXT priced at
$75.6 million and is a designer, developer, and seller of automated test equipment for the semiconductor industry.
North American Insurance Leaders AMEX:NAO priced at
$100 million and is a blank check company organized to acquire the assets of an insurance business.
eFuture Information Technology NASDAQ:EFUT priced at
$9 million and is a provider of integrated software and services for China’s supply chain front market.
Tim Horton’s NYSE:THI priced at
$671.6 million and is a Canadian-based quick service restaurant chain.
Macro Bansud Bank NYSE:BMA priced at
$197.8 million and is a provider of financial and banking services in Argentina.
Global Traffic Network NASDAQ:GNET priced at
$19 million and is a provider of customized traffic and news reports to radio and television stations in Australia and Canada.
Clayton Holdings NASDAQ:CLAY priced at
$127.5 million and is a provider of outsourcing services, mortgage-related analytics and consulting services for buyers and sellers of mortgage and debt instruments.
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