Austin Third Quarter VC Deals and Dollars Down with $120 Million Invested in 24 Companies

Panoramic Austin Texas Reflections Lady Bird Lake 2015By LAURA LOREK
Reporter with Silicon Hills News

Venture capitalists invested $120 million in 24 deals in Austin in the third quarter, according to the MoneyTree Report from PricewaterhouseCoopers, based on data provided by Thomas Reuters.

In Austin, venture capital deals and dollars are down 43 percent and eight percent respectively for the third quarter of 2016, compared to the same quarter a year ago, according to the MoneyTree Report.

“It’s not a particularly eventful quarter,” said Larry Westall, partner at PricewaterhouseCoopers in Austin.

Historically, the third quarter is one of the slowest and because this is an election year, it is even slower, Westall said.

Nationwide, venture capitalists invested $10.6 billion in 891 deals in the third quarter of 2016, down 36 percent and 25 percent respectively, compared to the same quarter a year ago, according to the MoneyTree Report. And down 32 percent in dollars and 11 percent in deals compared to the second quarter of this year.

Yet, VC investments are still historically high. It was the 11th consecutive quarter of more than $10 billion invested in a single quarter, according to the MoneyTree Report.

“The decline in venture capital activity this quarter is part of the normalization process that is expected after a quarter in which record-breaking investments dominated headlines,” Tom Ciccolella, US Venture Capital Market Leader at PWC. “Despite deal count being the lowest since Q3 2010, quality deals continue to receive funding. The broader ecosystem remains healthy, bolstered by a lift in biotechnology within the top deals and overall, strong fundraising, and a continuation of the trend towards investments in non-traditional industries.”

In Austin, companies in the software industry attracted the most investment dollars with $72 million going to 12 deals, up 162 percent in investment dollars and a 33 percent increase in the number of deals compared to the previous quarter. Cognitive Scale with $21.8 million in funding was the largest deal.

Other industries in Austin experiencing increases in investment dollars compared to the previous quarter included consumer products and services, electronics, healthcare services, medical devices and equipment and retailing and distribution.

Austin led the state in the number of investments in dollars and deals, outperforming both Dallas and Houston, which attracted $60 million for six deals and $28 million for four deals respectively.

TOP 10 Austin VC Deals in the Third Quarter

Company Industry Venture Capital
Cognitive Scale Software $21.8 million
Flosports Media and Entertainment $21.2 million
Dataworld Software $14 million
Ambiq Micro Semiconductors $9.4 million
Caringo Software $8.8 million
WP Engine Software $8 million
Mangstor Semiconductors $5 million
Owlchemy Labs Software $4.9 million
Freed Foods Consumer Products and Services $4.7 million
Aceable Software $4 million

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