As the technorati and other associated hangers-on descend on Austin for South By Southwest, we wanted to use CB Insights VC data to highlight investment trends across the venture capital ecosystem in Texas including the state’s top stages, sectors and recent VC financings.
In 2013, Texas saw venture capital funding activity reach $1.34B across 133 deals. While Texas saw fewer dollars invested than both New York and Massachusetts, the state’s VC deals saw a year-over-year increase of 15% while funding jumped by a notable 61%. Stripping out GenBand’s mega $343M deal, we see that Texas VC financing activity still rose 20%. Within the state, Austin dominated VC financing levels in 2013 – taking 46% of all venture deals.
Texas Financing Trend By Sector
Concentrated primarily in Austin’s tech hub, Internet and mobile companies combined to take just under half of Texas VC deals in 2013. Healthcare saw 14% of deals in the state.
On the funding front, mobile & telecom companies took 37% of funding share behind GenBand’s mega round. Internet firms took 18% of all funding last year, followed by healthcare which grabbed 16% of funding share. Energy deals took 8% of funding on the back of Houston-based nanoproducts company Oxane Materials’ notable raise.
Texas Financing Trend By Stage
Peeling back Texas financing activity by stage, we see that seed and Series A activity took a combined 44% of deal volume in Texas versus 39% in 2012 as VCs pursued more early-stage deals in 2013 – a trend observable globally.
While 2013 saw just a small YoY increase in Series A deals, funding share at the Series A stage rose from 12% in 2012 to 19% in 2013. Series C funding share also saw a material jump, hitting 37% on a YoY basis. Meanwhile, Series B saw a dip in YoY funding share, from 31% to 20% in 2013.
The Largest Texas VC Deals of 2013
Telecom equipment maker GenBand’s $343M round from investors One Equity, Venrock and Sevin Rosen Funds took the largest round that included the participation of an VC investor in 2013. The second-largest deal went to mobile trade-in operator and redistributor eRecycling Corps, which notched a $105M Series C round led by Kleiner Perkins Caufield & Byers. Notably, eRecycling Corps is another company that folks might not consider clean tech but should.
Other notable Texas-based rounds from last year include carbon capture firm Skyonic, which raised $39M in addition to $80M in debt, and social media management startup Spredfast, which raised a Series C in 2013 and then added a $32.5M Series D round this January (adding to the rising number of tech startups raising multiple double-digit rounds in a 12-month span).
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