January 5, 2015

BostInno

Boston's Innovation Economy Raised $4 Billion during Its Breakout 2014

That's up by more than $1 billion from 2013.

(Article features photo of Actifio CEO Ash Ashutosh. The storage software company raised $100 million in funding in 2014.)

Elsewhere on this site I’ve argued that 2014 was a curse-reversing year for Boston tech, thanks to a string of wins—among them major IPOs, acquisitions and major growth for myriad startups.

Here I’d like to offer some data that I think supports that thesis, courtesy of the 2014 venture capital funding report from CB Insights.

The report shows that Massachusetts companies raised $4.2 billion in venture capital last year, up 37 percent from a year earlier (when the state raised $3 billion) and easily the most for Massachusetts since CB Insights began putting out these reports in 2009.

The number of deals in the state also grew, by 9 percent, to 346.

Tech vs. biotech

Since we mainly cover technology (software/hardware) at BostInno rather than biotech, I broke out how much of last year's venture activity was actually in the high-tech sphere. And what I found was very interesting: tech is now just as large of a contributor to venture funding totals in Massachusetts as biotech.

• Both healthcare/biotech and tech* saw $1.93 billion raised in VC funding in 2014 (each taking 46 percent of the state’s total).

• That’s also interesting because, previously, healthcare was clearly dominant in its share of the venture capital funding pie in Massachusetts; in 2013, healthcare took 46 percent of total funding compared to 40 percent from tech.

• Tech funding shot up 61 percent last year compared to 2013 ($1.93 billion vs $1.2 billion).

• Tech deals increased 16 percent last year, to 221 deals, from 191 deals the year before.

None of this is meant to suggest that healthcare is any less important in Massachusetts—just that no one should think of the region as “that place that’s good at biotech.” Clearly, some venture capital investors believe Boston is a lot more than that.

Major deals for the year in tech included $100 million for Actifio, the Waltham maker of software for managing data copies, which valued the firm at $1.1 billion; $57 million for Cambridge's SimpliSafe, maker of a next-gen home security system; and $50 million for Acquia, the Burlington-based provider of products, services and technical support for the open-source Drupal content management system.

To read the full article, visit: http://bostinno.streetwise.co/2015/01/15/boston-venture-capital-funding-in-2014-reached-4-2-billion/