Week 03/19/2007 through 03/25/2007

Prepared by Capital Hunter analysts:

Venture capital investment had a strong week, with over $450 million placed into 37 companies, a solid increase from last period and in-line with our expectations. Biotech companies raised the most capital, with over $130 million going to the sector, but digital advertising (which we classify as IT Services) and media companies garnered a significant share as well. Eyeblaster, which provides digital marketing services, raised $30 million from a collection of private investors, including Eli Barkat, Jonathan Kolber and board member Guy Gamzu. Another digital advertising company, Aggregate Knowledge, which provides online content ranking solutions, raised $20 million from as of now undisclosed investors, though First Round Capital provided $230,000 in seed money last year. It is not known whether or not First Round provided capital in this round. Real D, which provides next-generation 3D technologies to movie theaters, raised $50 million from Shamrock Holdings and plans to use the capital the further development of their distribution system and to further expand nationwide. Software investment continued its notable absence, as only 7% ($29.4 million) of the total capital this period went to such concerns. Other sectors, including alternative energy and networking equipment, were shut out entirely. We expect venture investment to moderate over the next couple of weeks, with funding in the $400-$500 million range, provided that we don’t have any funding outliers. Stay tuned.

The IPO market continued to hold up well, with four companies going public, the same number as the week before. Cheniere Energy Partners was the largest of the bunch, and raised over $200 million Wednesday on the American Stock Exchange. A corporate backed venture, Glu Mobile, which publishes mobile entertainment worldwide, raised approximately $85 million and is trading near its offering price. Without further ado, here are the four companies that went public this period:

Cheniere Energy Partners AMEX:CQP priced at $283.5 million and is a limited partnership formed with Cheniere Energy to operate the Sabine Pass LNG receiving terminal.

Glu Mobile NASDAQ:GLUU priced at $83.4 million and is a global provider of mobile entertainment.

CastlePoint Holdings NASDAQ:CPHL priced at $111.4 million and is a provider of property and casualty insurance services.

Alpha Security Group AMEX:HDS.U priced at $60 million and is a blank-check company looking to acquire assets in the homeland security or defense industries.

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CapitalHunter.com was able to verify that $451 million of venture capital was invested in 37 U.S.-based companies during the past week. The average deal size was approximately 12.19 million. The amount of venture capital invested this period increased by 48% compared the last period’s $305 million.

California was the largest recipient of venture capital funding this week. Eighteen California companies raised $288.0 million in new equity financing, which accounted for a whopping 64% of the total venture capital invested this reporting period. The largest investment in California was placed into Intarcia Therapeutics. Intarcia Therapeutics raised $50 million in late-stage financing and is a developer of drugs for the treatment of cancer, immunological and infectious diseases.

The biotechnology sector raised the most venture capital this reporting period, with only five companies raising $134.3 million in venture financing. Biotechnology companies accounted for approximately 29% of the venture capital this period. The largest investment in the sector was placed into the previously mentioned Intarcia Therapeutics.

Start-ups raising their second stages of funding represented the largest share of the funding pie, as 41% of all money invested this period went into such companies. The largest Series B funding was placed into the previously mentioned Eyeblaster.

The three largest venture deals this period are as follows:

The following thirteen companies and other unnamed investors funded the above mentioned top three venture capital investments for $140 million:

A total of 63 equity financings of private and public companies occurred during this reporting period. Each of the 63 equity financings are profiled in a weekly report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.

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