Prepared by Capital Hunter analysts:
Venture capital investment managed to rebound, with $416.7 million invested across 36 companies, a 30% increase from last period’s mediocre $325 million. More importantly however venture capitalists spread their investments across many different industries as opposed to concentrating their capital in software, life sciences and digital media companies as has been the case the past few weeks. While software had the strongest showing of any sector, other important industries managed to get their share of the loot as well. Semiconductor investment, which has badly languished the past few weeks, received a big boost, with investments in San Jose-based Achronix Semiconductor, which makes field-programmable gate arrays, and Akustica, a Pittsburgh-based firm that provides system-on-a-chip solutions for the wireless and consumer electronics industries. High-tech electronics investment also did well, with companies such as A123 Systems, a Watertown, Massachusetts based provider of low-cost lithium batteries for laptops, PDAs and other portable consumer electronics, receiving $40 million in Series D funding from a bevy of notable venture firms despite having received $30 million (Series C) early last year from many of those same firms. Network equipment and telecommunications companies also managed to do well, taking in a combined $50 million, close to the total investment those sectors received the past few weeks. Alternative energy investment has lagged the past few months, likely due to the fact that oil has come down from its lofty highs the past year and is making certain sub-sectors of the industry economically unfeasible despite the sizable tax subsidies companies in the sector receive. We do not expect oil to continue to fall indefinitely, so if oil ever begins to rise again you’ll probably see more investment going to the sector. Hopefully we’ll see better investment numbers over the next few weeks, but we are unsure as to what the weeks ahead hold.
The IPO market finally had a bit of an uptick this period, with four companies listing on the NASDAQ, the highest total since late last year. The largest of the bunch is Mereulo Maddox Properties, a developer of commercial and residential properties in densely populated areas in California, which priced at $400 million and is up approximately 6% from its first day of trading Thursday. The most interesting on the bunch however is Oculus Innovative Sciences, and not just because it is from an industry that venture capitalists actually invest in. Oculus, which makes acute wound treatment products, raised close to $60 million since 2003 not from well heeled venture capital firms but from accredited investors brokered by Brookstreet Securities. At least 361 separate accredited investors took part in the companies financing, raising $8 million in Series A funding in 2004 and $47.4 million in Series B funding in 2005, a far cry from the multitude of life science funds and biotech companies that generally participate in large life science deals. While this certainly does not signify a trend, it is something that we will keep an eye on and look into. Well, without further ado, here are the four companies that braved the public market waters:
Aerovironment
NASDAQ:AVAV priced at $113.9 million and is a developer of small unmanned aircraft for the Department of Defense.
Oritani Financial MHC
NASDAQ:ORIT priced at $150 million and is the holding company of Oritani Financial, a provider of banking services to customers in New Jersey.
Oculus Innovative Sciences
NASDAQ:OCLS priced at $105.8 million and is a provider and developer of chronic and acute wound care products.
Mereulo Maddox Properties
NASDAQ:MMPI priced at $400 million and is a developer and redeveloper of commercial and residential real estate in California.
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