IVCA Releases Second-Quarter Private Equity Monitor Reviewing VC, Private Equity Investments

IVCA Releases Second-Quarter Private Equity Monitor Reviewing VC, Private Equity Investments

August 12, 2008

CHICAGO - “ Venture capital investment in Illinois rose to $135.8 million in the second quarter (up 50.6 percent from the first quarter of 2008) when state companies received $90.2 million in venture investment funds, according to the Illinois Venture Capital Association based on data provided by Thomson Reuters' VentureXpert.

Nineteen companies received funds in the second quarter as compared to 18 in the first quarter and 22 companies received a total of $82.1 million in the second quarter of 2007. Funds raised by Illinois companies in the second quarter were slightly below the five-year quarterly average of $141.1 million.

Illinois companies ranked No. 14 in the country in the amount of VC investment for the second quarter. This is well below Ohio companies, which raised the most funds at slightly more than $7 billion for the quarter.

For the first half of the year, Illinois ranked No. 15 with $226 million invested in state companies. California companies raised the most funds in the first half ($8.7 billion).

Information technology investment in Illinois took a big jump in the second quarter. Ten companies received a total of $124.5 million, which is up nearly 400 percent from the first quarter and above the second-quarter 2007 pace of $40.7 million. IT investment in the second quarter also surpassed the five-year quarterly average of $57.7 million.

Venture capital investment in health care companies slipped, however, with three companies raising $4.5 million. This is below the first-quarter total of $19.8 million and the five-year quarterly average of $26.3 million. One of the single largest investments of the quarter ($26 million) went to Initiate Systems, which is a data management software and solutions company backed by several IVCA members.

Investment in Illinois - œgreen-  companies also jumped in the second period of the year with four companies receiving $14.8 million in venture capital funds. The quarterly total surpassed full-year totals for every year since 2003.

Green company investments include investments in companies involved in such industries as battery manufacturing, alternative energy sources, energy conservation, recycling as well as biotech processes for pollution, toxic waste control and oil recovery. Included in the numbers is Tetravitae BioScience, which is backed by IllinoisVENTURES.

Tetravitae develops and commercializes alternative fuels through biomass conversion. The company focuses on the fields of process engineering, synthetic biology, reaction management and hyper-productive feedstocks. TetraVitae specifically focuses on butanol production.

Buyout capital investment in Illinois companies in the quarter almost doubled from the first period. They totaled $224.7 million for the quarter as compared to $116.2 million in the first quarter and $122.8 million in the second quarter of 2007.  The pace of buyout investment lagged behind the five-year quarterly average of $272.5 million.

Nationwide, Illinois ranked No. 12 in the amount of buyout capital invested in states. New York ranked No. 1 with $2.8 billion in buyout capital investments. Download the second-quarter 2008 IVCA Private Equity Monitor here.