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Venture capital investment soars to decade-high, but not in Florida

Venture capitalists are pouring money into companies at levels not seen in more than a decade, nearly hearkening back to the dot-com era.

But Florida continues to largely miss out on the party.

Nationwide, venture capitalists put $13 billion into 1,114 deals in the second quarter of 2014, according to the latest MoneyTree Report being released today by PricewaterhouseCoopers and the National Venture Capital Association.

The quarterly analysis, based on data from Thomson Reuters, marks the highest level of venture capital funding since investors put $13.1 billion into deals in the first quarter of 2001. For the first half of the year, total investment reached $22.7 billion, the highest first-half total since 2001.

Less than 1 percent of that money, however, is directed to companies in Florida, which is on track to becoming the third-biggest state in the country this year.

Florida investors closed on just 13 deals totaling less than $113 million in invested capital in the second quarter. That's up 57 percent from the first quarter, but down 15 percent from year-ago levels.

Mark McCaffrey, global software industry leader for PricewaterhouseCoopers, said Florida shouldn't be disheartened. To the contrary, he sees the state on the rise.

"I do hear Florida's name coming up a lot," said McCaffrey, who is based in San Jose, Calif. "You're seeing some larger deals." Among the state's strengths is its diversity, as companies in software, media and entertainment, industrial energy and biotech are all drawing investors.

McCaffrey said the latest quarterly report was skewed in part because it included the biggest deal in MoneyTree's tracking history, a $1.2 billion deal out of Silicon Valley. Moreover, he said, many of the California companies drawing investor interest have operations in Florida — so funding is flowing south whether or not that's reflected in the MoneyTree report.

The biggest Florida deal was out of Orlando: $50 million going to software firm Kony Solutions. Second biggest was in the industrial energy sector with $26 million going to AquaVenture Holdings in Tampa.

Nationally, the level of investment is still far shy of the height of the dot-com boom. "Despite being over $15 billion below the peak, you can't ignore the historical significance of venture investment during the second quarter," said Bobby Franklin, president and CEO of the venture capitalists association.

The software industry received the highest level of funding of all industries, rising 50 percent from the first quarter to $6.1 billion. Biotechnology was the second-largest sector for dollar investment, with $1.8 billion going into 122 deals.

Contact Jeff Harrington at jharrington@tampabay.com or (813) 226-3434. Follow @JeffMHarrington.

Venture capital investment soars to decade-high, but not in Florida 07/18/14 [Last modified: Thursday, July 17, 2014 10:14pm]
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