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Pittsburgh-area venture capitalism down slightly in 2nd quarter

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Top deals

Venture capital funds invested a total of $28.3 million in 21 Pittsburgh-area companies during the second quarter. Below are the top five deals, listed by company name, investment amount and investor.

• Aquion Energy Inc., $10 million, multiple funds

• ALung Technologies Inc., $9.2 million, Birchmere Ventures

• RedZone Robotics Inc., $3.3 million, ABS Capital Partners

• Efficiency Network Inc., $2 million, Innovation Works

• Medallion Analytics Software Corp., $1.3 million, Originate Ventures and Osage Partners

Source: National Venture Capital Association

Friday, July 26, 2013, 10:02 p.m.
 

Venture capitalists invested $28.3 million in 21 Pittsburgh-area companies during the April-June quarter, according to a report from the National Venture Capital Association and PricewaterhouseCoopers.

Compared with the same period a year ago, more companies received money but the total amount fell. A year ago, 16 companies received a total of $39.9 million, the report said.

Mike Stubler, managing director of Downtown venture capital firm Draper Triangle Ventures, cautioned against reading too much into quarterly figures.

“Things can be so lumpy,” he said. “You get one big raise ... it can dramatically skew the numbers.”

Leading the list of local investments with $10 million in financing was Aquion Energy Inc., a Lawrenceville-based company that produces batteries used to store electricity generated from renewable sources such as wind and solar.

Aquion plans to begin full-scale battery production this year in a former Sony factory in East Huntingdon.

Aquion officials could not be reached for comment. In an April 2 news release, the company said it closed a $35 million fundraising round led by Bright Capital and including Microsoft co-founder Bill Gates, Gentry Venture Partners, Kleiner Perkins Caufield & Byers, Foundation Capital and Advanced Technology Ventures.

Also among companies bringing in more than $1 million from venture capital funds in the second quarter were South Side medical device company ALung Technologies Inc.; RedZone Robotics Inc. of Lawrenceville; Carnegie-based Efficiency Network Inc., which designs energy efficiency systems; and Medallion Analytics Software Corp., a Thornburg developer of software for the real estate industry.

Stubler said generally there is “a shortage of venture capital in the Pittsburgh market.”

Much of the funding for startup technology companies comes from so-called angel investors and other individuals, he said.

Draper Triangle raised $40 million toward a $100 million fund that will invest half of its money in local companies, Stubler said.

Nationally, investments in the second quarter were up, the association said. Venture capitalists invested $6.7 billion in 913 deals.

“The increase in early-stage investing is an encouraging sign that entrepreneurs with innovative ideas can get the funding they need to succeed,” said Mark McCaffrey, global technology partner for PricewaterhouseCoopers.

Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or anixon@tribweb.com.

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