North Carolina Entrepreneurs Raise $256 Million During Q2 2016

Second quarter shows an uptick in activity after a slow opening to the year

DURHAM, NC, August 1, 2016 — The Council for Entrepreneurial Development (CED), the largest and longest-running entrepreneurial network in the nation, today released the second quarter equity fundraising totals through its digital Innovators Report. CED’s Innovators Report tracks technology-based entrepreneurial activity in North Carolina.

During the second quarter, 47 North Carolina entrepreneurial companies in the technology, life science, advanced manufacturing and materials and cleantech sectors collectively raised more than $256 million in funding through 49 equity investment deals. This includes venture capital, angel, corporate, growth equity, family office and strategic investments.

“The second quarter was a return to the strong fundraising periods we experienced in 2015, when North Carolina companies raised over $1 billion in equity funding,” said CED President and CEO Joan Siefert Rose. “Despite economic headwinds and global uncertainty, funding in the first half of 2016 was robust and encouraging to those who were worried about whether investors would put their capital to work in such an environment.”

The second quarter of this year also marks an increase in deals and total funding as compared to the first three months of 2016. Through June 30 of 2016 North Carolina entrepreneurial companies have raised more than $425 million in equity funding. North Carolina’s life science companies have been the driving force in 2016 fundraising, responsible for 67% of the total funding amount.

Funding Breakdown

In Q2 2016, 47 North Carolina entrepreneurial companies raised $256,300,298 through 49 equity deals. Those totals, broken out by sector, are as follows:

  • Tech: 22 companies completed 23 deals, bringing in more than $73 million
  • Life Science: 20 companies completed 21 deals, totaling over $175 million
  • Advanced Materials and Manufacturing: 4 companies completed 4 deals, netting just over $5 million
  • Cleantech: 1 company completed 1 deal, raising over $2 million.

A majority of the deals in the second quarter were under $5 million. Nineteen of the 48 deals were for $1 million to $4.9 million and 16 of the second quarter deals were for less than $1 million.

Investor Activity

North Carolina companies attracted equity investments from 57 unique institutional funders during the second quarter of 2016. The top U.S. states for investors were:

  • North Carolina, 17
  • New York, 8
  • California, 7

There were 5 international investors that participated in deals. These investors are based in China (1), Israel (3) and Japan (1).

“Venture capital firms continue to take the majority of deal flow in North Carolina, but we are seeing growing interest from corporate funds and corporate strategic investors,” said Dhruv Patel, CED’s Director of Investor Relations. “Investors are telling me that they’re impressed with the companies in our state and are looking for big things from our entrepreneurs over the next few years.”

Exits

Thirteen (13) entrepreneurial companies were involved in mergers or acquisitions in Q2 2016. Those transactions were:

  • Reichhold merged with Polynt
  • Quintiles Transnational Holdings Inc merged with IMS Health
  • SciQuest Inc. was acquired by Accel-KKR
  • PowerSecure was acquired by Southern Company
  • Avioq was acquired by Shandong Oriental Ocean Sci-tech Co Ltd
  • FSC Pediatrics was acquired by Flamel Technologies
  • Acorn Applications LLC was acquired by Clintrax
  • goodmortgage.com was acquired by First Guaranty Mortgage Corp.
  • Leap Technologies was acquired by Trajan
  • Baker & Taylor was acquired by Follett
  • Cytonet LLC was acquired by Promethera Biosciences
  • Cirrus Pharmaceuticals, Inc. was acquired by Recipharm
  • NexJen Systems was acquired by Averna

CED’s proprietary Innovators Report tracks data not readily available elsewhere. CED leverages its deep relationships with companies and investors, and its partnerships with organizations and sources such as the National Venture Capital Association, the North Carolina Biotechnology Center, Ernst & Young and PricewaterhouseCoopers MoneyTree Report to gather, analyze and report these data. In addition to absolute numbers, the report uncovers trends in the entrepreneurial sector.

CED Innovators Report: www.cednc.org/innovatorsreport

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