Local venture capital investments increased in 2011 after falling two years in a row.
The 10 largest venture capital firms with offices or headquarters here collectively invested $70.7 million in local companies in 2011, a 71% jump from a year earlier, according to this week’s Business Journal list.
The list ranks venture capital firms by the dollar amount invested in Orange County.
Growth in the top two firms helped boost the total for the overall list.
Investments by No. 1 Sail Capital Part-ners LLC and No. 2 Versant Venture Management LLC made up more than 84% of the total amount. The list would have reflected a decrease of 20% discounting the two firms.
The list is more compact this year, as the Business Journal trimmed from the rankings venture capital firms whose investments have been minimal or nil in recent years.
Firms on the top half of the list were unchanged from a year earlier, while there was a shuffle in the lower ranks.
Irvine-based Sail Capital kept its top seat as it invested $34 million locally last year, up 42% from its 2010 investments, which totaled $24 million and accounted for more than half the total on last year’s list.
The firm now has $200 million in capital under management, up a third from a year earlier. It typically invests in companies in the clean energy, water and agricultural technology industries that are in expansion or growth stage.
Local companies in its portfolio include FlexEnergy LLC, an Irvine-based technology company, and M2 Renewables, a wastewater treatment and energy conservation company in Lake Forest.
Sail Venture Partners, the early- and midstage arm of Sail Capital, recently began a $100 million joint fund in Ontario, Canada, with Stifel Nicolaus Canada Inc., a subsidiary of St. Louis-based investment banking firm Stifel Financial Corp. The partnership will target clean-technology companies.
No. 2 Menlo Park-based Versant Venture, which has a Newport Beach outfit, saw a big jump in OC investments last year. It increased its local investments nearly sevenfold to $25.8 million, marking the largest jump among the firms on the list. Versant has $1.59 billion in funds under management companywide, the most among the firms listed.
Versant focuses on early-stage healthcare companies and has more than 80 companies in its portfolio.
One of Versant’s portfolio companies—San Clemente-based medical device maker Cameron Health Inc.—was recently acquired by Natick, Mass.-based Boston Scientific Corp. for $150 million in cash and up to $1.05 billion in potential payments. Cameron Health had received funding from Versant since its earliest stages.
WaveTec
Versant’s recent investments include participating in a $16.5 million financing round for Aliso Viejo-based WaveTec Vision Systems Inc. It also took part in a $65 million funding round for Irvine-based AcuFocus Inc., a medical device company that focuses on presbyopia, a condition in which the lens of the eye loses its capability to focus.
No. 3 on the list was Corona del Mar-based Miramar Venture Partners, which boosted its local investments by 16% for a total of $4.4 million. The firm manages $125 million in capital.
Miramar invests in technology-based industries such as cloud-computing, storage and digital media. Miramar’s most recent investments included seed rounds for Cirro and GenieDB Inc., San Juan Capistrano-based cloud-computing companies that are part of the Stuart Frost-led tech incubator Frost Venture Partners.
Joint Effort
Miramar joined with Menlo Park-based U.S. Venture Partners in November to invest in Jeda Networks Inc., a Newport Beach-based startup with a focus on software-defined data storage network systems. It also continued investing in existing portfolio companies.
“We invested in the series D financing round of Brand Affinity Technologies,” said Robert Holmen, a Miramar cofounder and managing director. Brand Affinity is a tech-based advertising startup in Irvine.
“We also invested in the series B financing round of Predixion Software, a $6 million round led by an undisclosed strategic partner,” Holmen said. “Previously, we invest- ed in both Predixion’s seed and series A rounds.”
No. 8 Huntington Ventures in Newport Beach invested $100,000 locally last year. It made no new investments in OC companies a year earlier and was ranked No. 13 on last year’s list. The company has $40 million under management.
Irvine-based Palomar Ventures was among the few firms that lowered its local investments last year. It moved up a spot to No. 5 despite a 38% decrease in local investments for a total of $1.6 million.
The firm is investing out of Palomar III, a $225 million fund. It has $525 million in total capital under management.
Irvine-based Medfocus Management Co. slipped to No. 6 on this year’s list. It dropped its OC investment by 73%, to $867,028 from more than $3 million a year earlier.
Download the 2012 OC’s LARGEST VENTURE CAPITAL FIRMS list (pdf)
