2016 has come and gone, but numbers—specifically those showing venture capital deal flow and investment amounts—are still trickling in.
TBD as to whether final figures will depict a year similar to 2015’s blockbuster fundings or something more akin to NC’s mediocre showing from 2011-2014. But if the most recent data from the National Venture Capital Association is an indicator, it looks like 2016 may fall somewhere in between.
VC Activity by Year in NC; Image and data provided by NVCA and Pitchbook; *Data current as of 12/5/16
In the meantime, with the help of the Council for Entrepreneurial Development (CED) we’ve gathered a list of NC’s top 10 overall raises (tech and life science combined), top five tech raises and top five exits in 2016. Notable from the list is a tech company leading the pack for total funding. But only one other tech company cracks the life science dominated top 10 list.
Eight of the top 10 companies are located in the Triangle, while the remaining two hail from western North Carolina. All five top exits happened in the Triangle as well.
CED Vice President Miriam Wilson explains the year like this: “Overall 2016 has been a solid continuation of funding and exit activity for North Carolina entrepreneurial companies. While we didn’t see blockbuster equity deals, the volume of activity has been consistent between 2015 and 2016, and we may even see more deals completed this year.”
Read on to see who cracked the top 10 list and stay tuned for more on how 2016 stacks up against previous years.
Top Ten Raises
1. Phononic
Location: Durham
2016: $71 million Series E in Q3/Q4
Total: $158.9 million
Investors: UBS Wealth Management (lead), eight others including local groups, Rex Health Ventures, Lookout Capital and UNC Rex Healthcare
Story: 2016’s largest raise comes from the eight-year-old company revolutionizing the heating and cooling industry through energy efficiency. Phononic’s technology can be used in all heating and cooling devices, from refrigerators to server coolers. Techcrunch reported that the raise will help expand manufacturing and marketing, as well as the job count in Durham.
Location: Chapel Hill
2016: $49.5 million Series A in Q1, acquired in Q3
Total: $49.5 million
Investors: Six undisclosed investors
Story: 2016 was a good year for Bamboo Therapeutics. In January, this UNC-Chapel Hill spinout developing gene therapy-based drugs to combat rare central nervous and neuromuscular diseases acquired a viral gene manufacturing facility (Vector Core facility) from UNC. Then in February it raised $49.5 million and was later acquired by Pfizer in August for $645 million.
Location: Morrisville
2016: $49 million Series A in Q2
Total: $49 million
Investors: Jazz Pharmaceuticals, Solas BioVentures and local Rex Health Ventures
Story: Unlike the other pharma companies who make this list, Arrivo doesn’t develop its own drugs, but instead acquires other drugmakers and guides them through the drug development, clinical trial and approval process. This funding may help Arrivo acquire its first products.
Location: RTP
2016: $47 million Series C in Q2
Total: $92.5 million
Investors: Cormorant Asset Management (lead), and 11 others including local Hatteras Venture Partners
Story: With a focus on developing and testing cancer-fighting drugs, G1 Therapeutics is using its fresh $47 million to expand drug development and clinical trials to test the effectiveness of its drugs that treat multiple types of cancer. If successful, these drugs could drastically improve the patient’s’ treatment outcomes.
5. Metabolon
Location: Morrisville
2016: $30 million
Total: $95.4 million
Investors: Essex Woodlands Health Ventures (lead)
Story: Metabalon has created a proprietary platform that scientists and researchers can use to better understand the diseases and how to treat them. This technology can provide a snapshot of how genes and lifestyle as well as environment impact a person’s health. The funding raised in 2016 went to commercialize its precision medicine products and buyout and retire shares held by previous investors.
Location: Asheville
2016: $29.2 million
Investors: Undisclosed and private share offerings
Story: Avadim specializes in developing drugs designed to combat diseases and infections at their earliest manifestation through products applied directly to a person’s skin. Its line of products are designed for a wide variety of users, from wrestling coaches (to prevent infections) to soldiers (to help keep soldiers clean and sanitary while in the field). Avadim filed 34 separate form D’s throughout 2016 totaling $29.2 million And in September, the company received a $4.9 million Job Development Investment Grant (JDIG) from the state to help break ground on a new 100,000 foot facility in Buncombe County. Some rumors posit the company is planning for a 2017 IPO.
Location: Durham
2016: $25.7 million in Q4
Total: $47.3 million
Investors: Sale of preferred return notes to 51 individuals
Story: Micell specializes in the development of biomedical devices that use a proprietary method to deliver drugs via blood vessels to a person’s body. This company is in the process of building and testing applications using the technology, like a coronary stent system, for example.
8. Gaia Herbs
Location: Brevard
2016: $20.86 million in Q1
Total: $22.6 million
Investors: 10 undisclosed investors
Story: Gaia is a non-traditional biotech company that owns and operates every bit of its herbal medicinal business, from growing and harvesting to manufacturing and selling the products. Gaia raised its first (and largest) round in six years in February 2016. Gaia Herbs immediately put the funding to use, dedicating $5 million to expand its production facilities and operations in its hometown of Brevard.
9. Pendo
Location: Raleigh
2016: $20 million Series B in Q4
Total: $33.25 million
Investors: Spark Capital, Bullpen Capital, Core Capital Partners, Idea Fund Partners, Salesforce Ventures, Contour Venture Partners
Story: With a large Series A raised just over a year earlier, an even larger Series B surprised many in the Triangle startup community and landed Pendo—the creator of a user-friendly product analytics software—in the top five tech raises of 2016.
Location: Morrisville
2016: $16.5 million Series A in Q1
Total: $46.1 million
Investors: Existing investors including local Pappas Ventures and Wakefield Group;
Story: Since spinning out of another Morrisville-based biotech company in 2013, Envisia has already raised $46 million to help create new treatments for diseases affecting a person’s vision or eyes.
Top Five Tech Raises
1. Phononic
2016: $71 million Series E
Total: $158.9 million
One of two tech companies to make the top ten list of raises in 2016. See above for more information.
2. Pendo
2016: $20 million Series B in Q4
Total: $33.25 million
Story: The second of the tech companies that made the top 10 list naturally appears on the top tech raises list of 2016. See above for more information.
Location: Raleigh
2016: $18 million Series C in Q2
Total: $29 million
Investors: Verizon Ventures, Yamaha Motor Ventures, Bob Young, USAA, Intel Capital, NTT DOMOCO
Story: The part drone-creator part data-science company raised its third round in the first half of 2016. PrecisionHawk has expanded from a strict agriculture focus to other sectors like insurance and energy and plans to expand to other industries soon too.
4. nCino
Location: Wilmington
2016: $15.67 million in Q2
Total: $64.67 million
Story: The cloud-based bank operating system company, nCino, had a good year of disrupting the banking industry. After a $15.67 million raise in Q2, it ranked 220th on Inc.’s top 500 list and landed SunTrust Bank as a customer.
Location: Durham
2016: $13.85 million in Q4
Total: $26.35 million
Story: SportsMEDIA raised money for the first time in six years in order to acquire a competitor, Sportvision. It’s not the first acquisition either. In 2012, SportsMEDIA acquired Information and Display Systems (IDS), another competitor. The company is now the dominant supplier of real-time, on-screen graphics, tickers, and other digital technologies to the sports broadcasting industry.
Top Five Exits
According to CED, there were 39 acquisitions in 2016, but only 10 companies have publicly disclosed their acquisition prices. This list is based off of those deals.
1. Sensus
Location: Raleigh
Acquisition amount: $1.7 billion in Q3
Purchaser: Xylem
Story: This IoT company uses smart sensors to gather and make sense of utility data. It sold for a cool $1.7 billion to Xylem, a wastewater and water treatment corporation.
Location: Cary
Acquisition amount: up to $1.2 billion in Q1 (McKesson bought 2 companies – Biologics and Vantage Oncology, together for $1.2 billion but the individual purchase prices were not disclosed)
Purchaser: McKesson
Story: The company focused on integrating and aligning care for cancer patients previously raised $29.82 million before it was acquired by McKesson, a healthcare company that delivers pharmaceuticals, healthcare services, supplies and equipment to healthcare organizations.
3. Bamboo Therapeutics
Location: Chapel Hill
Acquisition amount: $645 million ($150 million upfront with a possible $495 million more for a total $645 million)
Purchaser: Pfizer
Story: Bamboo Therapeutics is the only company to appear on both the top 10 raises and top five exits lists. After its Series A raise in February, Pfizer acquired the company in August for what could total $645 million when milestone payments are made to owners and investors. As part of the deal, Prizer also acquired the Vector Core Facility that Bamboo acquired from UNC in January, and Bamboo’s roughly 40 employees.
4. Patheon
Location: Raleigh
IPO: $640 million IPO in Q3
Story: This end-to-end supply chain solution for pharmaceutical companies went public in July. Share prices opened at $29 per share and prices have stayed relatively constant since.
5. ESP/SurgeX
Location: Knightdale
Acquisition amount: $130 million in Q1
Purchaser: Ametek
Story: The electronic power protection device manufacturing company was acquired by Ametek, a Pennsylvania based electronic device manufacturer in February.
**Editor’s Note: PowerSecure, SciQuest, and TowerCo all technically had “exits” and would rank above ESP, but given their history as public companies, and in TowerCo’s case, the acquisition of a “portfolio” of towers, CED left them off the top five list and so are we.
