Venture capital infusion in Austin-based companies has increased exponentially in 2015, according to the latest national study carried out by the National Venture Capital Association and PricewaterhouseCoopers. The study shows that a total of 99 deals closed by Austin startups have received $740 million in venture capital funding last year, an equivalent of 20 percent increase from 2014.
Venture capital has become a significant source of financing for new and early-stage companies. In most cases, firms looking for such funding give venture capitalists an equity stake of their businesses.
Most companies that receive VC funding offer innovative business ideas or technologies in areas such as IT and biotechnology. Austin is well represented in these sectors, which have been a major force of attraction for VC funding over the past several years.
Austin has numerous companies in revolutionary sectors, and this has created an ideal environment for entrepreneurs. This was reaffirmed by President Obama in his recent and final State of the Union address.
The VC funding that Central Texas received last year is the highest amount since 2001 when $1.14 billion was raised by 127 companies. In the entire Texas region, Austin was the biggest recipient of VC funding last year. It was followed by Dallas with $214 million then Houston with $160 million.
The biggest share of Austin’s venture capital went to the software industry which had 42 deals that raised $328 million. The second was the biotechnology sector which had 5 deals that raised $120 million. The third was the IT sector which had 8 deals that raised $56 million.
The top 10 VC deals for Austin-based companies during last year’s Q4 are as follows:
- Phunware, a mobile marketing company – $19.3M
- Savara Inc., developer of lung infection treatments – $18.5M
- TrendKite, a public relations software developer for corporate brands and agencies – $10.7M
- TVA Medical Inc., developer of end-stage renal disease treatments – $8.8M
- Vital Farms Inc., delivers pastured eggs to restaurants and groceries – $8M
- Umbel Corp, service provider of digital audience measurement – $8M
- Edgecase, provider of e-commerce portals’ curated product data – $7.5M
- RxWiki, software developer for pharmacies – $5.7M
- Aceable, offers software applications for educating drivers – $4.8M
- Pivot3, developer and provider of virtual server and shared storage appliances – $2.8M