Venture capital investing in Orange County companies reversed a three-year slide in 2005 as spending rose 73%, according to a report released by Ernst & Young LLP and Venture One.
The level of venture capital investing in OC companies hit $490 million in 2005 versus $282.8 million in 2004, according to the report. Investing in OC companies had fallen steadily since $512.6 million was spent in 2002.
Investing in OC was in line with the nation, said Don Williams, Ernst & Young’s director of venture capital services in Southern California.
U.S. Venture-capital investing in 2005 rose to its highest level since 2001, with $22 billion in capital invested in 2,239 deals.
In Southern California, OC saw the greatest increase in venture capital investing on a percentage basis.
Funding for Los Angeles companies grew less than 1% to $704.4 million. San Diego companies raised $897 million, a 25% decline from $1.2 billion in 2004.
Ernst & Young and Venture One, a Dow Jones & Co. unit, counted 44 venture capital deals in OC during 2005.
The last deal of the year was on Dec. 30 by Aliso Viejo-based Eyeonics Inc. It raised $16.2 million in a fourth round of venture capital funding and has its sights on an initial public offering this year.
Steve Naber, the company’s chief financial officer, said this month that Eyeonics is considering an initial public offering in the second half.
Ernst & Young’s Williams said funding for medical device makers in OC was the big story in 2005. There were six deals in this niche that raised $38 million in 2004. Last year, there were 15 deals with $205 million funded in OC companies, he said.
Other major venture capital investments in local medical device companies in 2005 included Irvine-based TherOx Inc. ($40.3 million); Lake Forest-based Orqis Medical Corp. ($22.7 million); Irvine-based Arbor Surgical Technologies Inc. ($20 million); Irvine-based Pegasus Biologics Inc. ($10.2 million); and Lake Forest-based 3F Therapeutics Inc. ($6 million).
The biggest deal done last year was Solarflare Communications Inc., an Irvine-based chip designer, which raised $48 million.
