San Diego Start-ups Pull In Almost $1 Billion In 3rd Quarter
In San Diego, 63 local start-ups raised $933 million in the quarter ($1 billion by 73 startups during the same quarter last year). However, just eight local tech startups received early stage funding in the quarter.
Biotech and life sciences startups made up 68% of the companies that received funding and 80% of the dollars taken in (5 years ago raising $50 million for a life science company was considered a big deal) , said Tim Holl, an audit partner with Ernst & Young in San Diego.
“Now we’ve had 17 deals over $50 million just this year,” said Holl.
“Certainly our life sciences industry is very robust right now, “ said Holl.
A tech companies called Seismic raised $92 million and consumer technology firm Ostendo Technologies raised $19 million.
“On the tech side, I would have liked to see a few more deals, but I don’t think it was unexpected by any means,” said Mike Krenn, head of Connect/San Diego Venture Group. “What I do like on the tech side, which is not in the numbers, is we are not seeing a lot of casualties.
“We are seeing companies that have raised money in the past that are doing the right things,” he continued. “They look like they have enough runway to come out of this thing as we get into the middle of next year.”
“The health care market is super strong right now in general,” said Krenn. “A lot of money needs to be put to work and a lot of it is making its way to San Diego. There is a lot of good science here. There are a lot of repeat entrepreneurs, and there’s just a lot of momentum.”
“We’ve had six companies in San Diego go public so far this year on U.S. exchanges,” said Holl. “All of them have been life sciences companies.”
“I think we will get over eight by the time we get to the end of the year,” said Holl. (Most in any year going back to 2010 is 8).
In all, $37.8 billion in venture capital was invested during the third quarter nationwide, which was on par with the same quarter last year, according to PitchBook-NVCA Venture Monitor.