NC no longer a top 10 state for venture capital, but Durham a top-10 city in health care deals

North Carolina no longer ranks among the top 10 states for venture capital deals and dollars – and it’s not even the top state in the southeast.

Georgia and Florida each had companies that did more deals and raised more money in 2013 than North Carolina, according to the 2013 Venture Capital Financing and Exit Report from CB Insights, a venture capital database.

North Carolina accounted for 38 deals totaling $356 million in 2013, according to the report.

Georgia had 48 deals representing $538 million in investment, which made that state tops in the Southeast for venture capital deals and No. 9 overall. Georgia’s standing was boosted by a $200 million series A round in the first quarter for mobile security startup AirWatch, an Atlanta company that was acquired by VMware on Wednesday for $1.54 billion. Florida edged out North Carolina for the No. 12 spot with 39 deals totaling $409 million.

In the national picture, CB Insights data shows that venture capital deals are on the rise. A total of $29.2 billion was invested in 3,354 deals, marking the fifth straight year of record deals.

Those figures are similar to totals reported last week in the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, which is based on data from Thomson Reuters.

Nationwide, the MoneyTree Report counts slightly more deals and dollars than CB Insights does. The MoneyTree Report listed a total of 3,995 deals and $29.3 billion in venture capital investment for 2013. As with the national data, the MoneyTree report lists more deals in North Carolina than CB Insights: 50 deals in 2013 raising $259.6 million in venture capital. While CB Insights provides state totals, the report does not break that data down deal by deal making it impossible to reconcile the differences compared with the MoneyTree findings. But CB Insights says North Carolina’s 38 deals include Argos Therapeutics, which raised $42.5 million in a third quarter series E round and subsequently went on to raise an additional $17.5 million in November; and Envisia Therapeutics, which spun out from Research Triangle Park nanotechnology company Liquidia Technologies with a $25 million series A round in the fourth quarter.

If there’s a silver lining for North Carolina in the CB Insights report, it could be in Durham’s standing for health care venture capital.

The Bull City ranked No. 10 among cities for health care venture capital deals represented by eight Durham companies raising $129 million in 2013. Cambridge, Mass. was the top city for health care with 29 deals raising $584 million in venture capital investment. Half of all of the 2013 health care deals were for companies in either California or Massachusetts. North Carolina took 3 percent of health care deals, tied with Texas, Colorado, Minnesota and Ohio.

In dollar terms, California represented 40 percent of VC health care dollars invested in 2013, followed by Massachusetts at 22 percent. North Carolina represented 4 percent of VC health care dollars invested, tied with New Jersey and Washington.

Initial public stock offerings made a comeback in 2013, up 55 percent compared to 2012. CB Insights says the growth was driven exclusively by health care IPOs. North Carolina health care-related companies that went public in 2013 include LipoScience (NASDAQ:LPDX); Quintiles (NYSE:Q); Heat Biologics (NASDAQ:HTBX); and Chimerix (NASDAQ:CMRX). Though IPOs were strong, mergers and acquisitions of venture-backed companies fell 5 percent compared to 2012. But IPO activity is expected to continue. Five North Carolina companies, including Morrisville-based Overture Networks, made CB Insights recent IPO pipeline report.

The top five states for venture capital deals were California, New York, Massachusetts, Texas and Washington. California and Massachusetts 2013 funding levels were consistent compared to 2012. But New York saw a big jump – 50 percent year over year.

Overall, VCs are showing that they’re comfortable investing their dollars at earlier stages. 2013 was a record year for seed investments as the total number of seed deals reached its highest mark since 2009. CB Insights reports that in aggregate, $893 million was invested across 843 seed VC deals. Seed VC deal sizes hit a four-year high in the fourth quarter; the average deal size was $1.5 million and the median was $1.3 million.