Today’s Headlines 7/22/2011
- Brown’s Chicken comes back to downtown Chicago
- Baxter benefits from hobbled competitor
- USG posts 2Q loss
- Venture investments leap in Chicago
- McDonald’s profit rises, beats Street
- Caterpillar shares tumble as earnings miss estimates
View All of Today’s News Headlines
— Venture-capital funding in Chicago soared in the second quarter, with total investment nearly doubling from a year earlier to $215 million.
The number of second-quarter deals was unchanged from a year earlier at 14, according to Dow Jones VentureSource.
Coupled with an unusual surge of early-stage investments in the first quarter, the overall volume of venture deals is up 57% from a year ago to 33 investments in the first half of 2011. The number of deals has been in double digits for three straight quarters for the first time since 2005.
Chicago dramatically outpaced the nation, but because the number of deals here is relatively small, such wide swings are common. Nationally, the number of second-quarter deals slipped 1.5% with the total amount of venture investment down 5% from a year earlier, according to VentureSource.
The rising amount of Chicago venture investment reflects both the later stages of deals and rising valuations for tech companies, fueled by a recovering IPO market. It also shows increased investment from out-of-state venture firms, particularly Silicon Valley funds, which are paying more attention to Chicago following the success of online daily-deal provider Groupon Inc.
The median investment amount jumped to $15 million in the second quarter, up from $1.5 in the first quarter and $5.3 million a year earlier.
Several companies raised more than $20 million in the quarter, led by Bolingbrook-based biochemical maker Elevance Renewable Sciences Inc., which landed $50 million in a later-stage investment.
Chicago-based Braintree Inc., which helps companies handle electronic payments, raised $34.2 million, and Mu Sigma Inc., a Northfield-based data-analytics firm with 1,200 people, raised $25.8 million in its first round of outside capital. SitterCity Inc., an online baby-sitting service, raised $22.6 million in a follow-on investment.
Some of that money came from Silicon Valley. MuSigma’s investor was Menlo Park, Calif.-based Sequoia Capital, while Braintree’s infusion was from Palo Alto, Calif.-based Accel Partners.
“In the second quarter, large deals in capital-intense areas drove up the total capital invested,” said Gina Chan, research manager at Dow Jones VentureSource.
Chicago-based New World Ventures, headed by J. B. Pritzker, was the most active investor during the quarter with two deals, according to Dow Jones.
Venture investment in Chicago has been climbing steadily from a low of four deals totaling $13.5 million in the third quarter of 2009.
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