The biggest venture capital firms in Orange County continued to increase their investments in local companies, though the pace of growth slowed compared with a year earlier.
This week’s Business Journal list features the nine most active venture capital firms with headquarters or significant operations here. They’re ranked by the dollar amounts invested in OC companies and combined for $87.2 million in investments last year, up 10% over 2013. The increase followed a 60% jump the prior year.
The number of deals in 2014 totaled 40, up from 20 a year earlier.
The numbers indicate that there are more investments being made at smaller amounts, a trend that’s taken shape as startup costs drop and as venture capitalists make investments earlier in the life cycle of target companies.
• Perennial No. 1, Versant Venture Management LLC, invested about $63 million in OC companies last year in 13 deals. That compared with $59 million across three deals in 2013.
Versant specializes in biotechnology and medical device companies. It was founded in 1999 in Northern California and Orange County. The firm is headquartered in San Francisco and has an OC operation in Irvine overseen by managing directors Bill Link, Barbara Lubash and Donald Milder.
It has about $1.9 billion in funds under management after closing a $305 million fund last December, called Versant Venture Capital V.
Versant’s OC deals over the past year include participation in a $21 million round for Irvine-based medical device company AcuFocus Inc., which aims to treat age-related loss of near vision.
The firm had several exits of portfolio companies last year, including Aliso Viejo-based WaveTec Vision’s sale in August to Alcon, part of Novartis International AG.
• Irvine-based Sail Capital Partners LLC kept the No. 2 spot with $10 million in local investments last year. That was down about 31% from 2013, when it made about $14.5 million worth of local investments.
Sail, headed by founder and Managing Partner Walter Schindler, has $250 million in funds under management, unchanged year-over-year.
Schindler said Sail opened offices in January for “a new Sail Capital merchant bank” each in Mountain View and London.
“The business plan of the merchant bank will be to represent a small number of family offices in large unique projects,” he said.
• Lotus Innovations, the sole newcomer this year, landed on the list at No. 3 with $7 million in OC investments. The Irvine-based firm was founded in 2013 and raised $10 million for its first fund last year.
Lotus, headed by managing directors Christian Mack, Linda Ritchie, and Mark Prynn, focuses on early-stage information technology services companies.
• Miramar Venture Partners is No. 4 with $3.2 million in local investments, down about 20% from 2013. Its number of deals was up from by five to six, despite the lower dollar amount invested.
The Corona del Mar-based firm is headed by managing directors Bruce Hallett and Bob Holmen and typically looks for investment opportunities in digital media and cloud computing. It has $143 million in funds under management overall, up about 2% year-over-year.
• No. 5, Okapi Venture Capital in Laguna Beach, invested nearly $3 million in local companies, a jump of $2.3 million, or 365%, over the year prior, the largest percentage growth on the list.
“The number of investment opportunities continues to increase significantly these days,” said Marc Averitt, cofounder and managing director alongside Sharon Stevenson.
“We are simply seeing more and more investment opportunities and are investing in the best of them. Last year, a number of those opportunities happened to be Orange County companies, so it marked an increase in year-over-year investment in Orange County.”
Okapi manages about $47 million overall, unchanged from last year. It specializes in the technology and life sciences sectors.
“I think Orange County continues to be stronger in healthcare innovation, but I am seeing signs of a resurgence of certain technology-based investment activity, particularly in semiconductor and system companies pursuing connected devices and the ‘Internet of Things,’ ” Averitt said in an email.
“We are also developing a stronger enterprise software community here … with companies like CrowdStrike and Connectifier as recent examples.”
Newport Beach-based Connectifier received $4 million in Series A funding in September from Okapi and True Ventures in Palo Alto. It provides tech- and data-based services to employers and recruiters to help in the hiring process.
• No. 6, Laguna Woods-based Transmeridian Capital Services, invested $550,000 in OC companies last year, double the 2013 total.
• Huntington Ventures in Irvine backed two OC companies last year for a total of $100,000, down 33%.
