Prepared by Capital Hunter analysts:
After a strong showing last period, venture investment slipped considerably, with only $325 million going to 34 companies, as opposed to $587 million going to 37 companies the previous period. One reason for the drop-off was due to a lack of biotech investment, which usually accounts for a considerable chunk of weekly funding totals. Another may be the fact that outside of three sectors, funding was quite limited. The three sectors we are talking about in this case are software, medical devices and digital media. These three sectors combined for approximately 75% of all venture capital this period, led by the $59.5 million Brightcove received from a large consortium of corporate and venture capital firms, which included AllianceBernstein, Allen & Company, Accel Partners, Brookside Capital, General Catalyst Partners, Maverick Capital, Transcosmos, IACInteractive, Hearst Corporation and The New York Times. Brightcove is essentially a competitor to YouTube and provides television services over the Internet, albeit with a bit more refinement and sophistication. Outside of Brightcove, there were not any large (>$25 million) investments, and more than two-thirds of this period’s financings were for less than $10 million. Workshare Technology, which provides secure content compliance software, raised $23 million from Steelpoint Capital Partners, Intel Capital and Quester and plans to use the funding to make acquisitions, expand market distribution and develop new service delivery models. The other $20 million investment this period, Sparkplug, raised $22.5 million in Series B funding from Ignition Partners, Greenspun Corporation, Allen & Company, Trilogy Equity Partners and Square 1 Bank and provides wireless broadband services to businesses throughout the country. We do not expect weekly funding totals to be this low for at least the next few months, but we could certainly be wrong. For the time being, expect medical device and digital media investment to remain relatively strong into the foreseeable future.
The IPO market continues to languish, with only a single company listing for the third week in a row. In fact it isn’t a standard operating company, but a Texas-based oil trust. Hopefully (and we do mean hopefully) we will have more to report in the coming weeks:
MV Oil Trust
NYSE:MVO priced at $150 million and is an oil trust that distributes 80% of net profits to shareholders.
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