CED reports $175M through 62 capital deals in Q3

Entrepreneurial companies across North Carolina raised $175 million in capital across 62 deals in the third quarter, according to a new report from the Council for Entrepreneurial development. That’s much higher than three other VC-focused reports but very close to the total reported by the National Venture Capital Association.

So far this year, North Carolina-based entrepreneurial companies have raised just over $600 million, according to the CED’s Innovators Report, which was released Tuesday morning.

While it appears North Carolina firms won’t match the $1.18 billion in capital that CED says N.C. firms raised in 2015, the state is outperforming 2013 and 2014 already.

Year-over-year, the N.C. capital performance also is far below last year’s $441 million. But the CED’s Steve Hinkson points out: *Keep in mind this quarter had 2 $30m+ life science deals and the AvidXchange deal of $225 million.”

The Innovators Report casts a wider net than traditional venture capital reports such as Pricewaterhouse Moneytree, Dow Jones VentureSource and CB Insights. The CED includes venture capital, angel, corporate, growth equity, family office and strategic investments.

The three traditional reports found less than $100 million in venture deals for the third quarter, snapping North Carolian’s streak of seven consecutive $100 million-plus quarters.

However, the NVCA with its new venture partner PitchBook reported 36 deals for $168 million.

Half full, not half empty

The CED report sees deal flow positively, even with funding down from a year ago which saw venture deals made across the U.S. at a rate not seen since the “dot com” boom days.

“It compares favorably without the big deals of 2015, yes,” Hinkson says, “but we would like to continue seeing those types of deals. They just haven’t materialized yet in 2016.”

Even without the AvidXchange deal, tech funding fell to $46 million from $83 million.

Life science dropped to $84 million from $112 million.

However, advanced manufacturing and related deals jumped to $36 million from $16 million (with Phononic representing most of that at $30 million.)

And cleantech improved to $8 million from $4.4 million.

“Tech funding has been consistent this year. We saw an uptick in cleantech activity this quarter,” Hinkson explained, but he also noted: “The advanced manufacturing and materials funding total is a little misleading as $30 million of the total was due to one deal.”

Inside the numbers

“We saw a healthy number of deals in the third quarter, but the funding per deal is relatively low,” Miriam Wilson, CED’s Vice President of Investor Relations, pointed out. “So far in 2016, companies haven’t landed many deals valued at $30 million and above, which is holding down the total compared to 2015, but the amount of activity is a positive sign and the cumulative total this year has already surpassed 2014.”

Breaking deals down by category:

Tech: 27 companies completed 30 deals, bringing in $46,326,266
Life Science: 21 companies completed 21 deals, totaling $84,740,801
Advanced Materials and Manufacturing: 9 companies completed 9 deals, netting $36,593,237
Cleantech: 2 companies completed 2 deals, raising $8,084,270.

Most of the deals were for less than $5 million with 32 coming in under $1 million.

The state did draw investors from 42 funders, including five in California and five in China. Two from the U.K., one from Ireland and one from Canada participated.

Headed to the exits

Ten firms also reported exits, the CED noted.

Biotechs Patheon and Novan pulled off IPOs.

Mergers and acquisitions included: