Paced by a pair of advanced-stage hightechnology businesses, Westchester’s venture capital market rebounded to the highest amounts of financing recorded since the economic skid put an end to therecords of the 1990s boom.
Six Westchester companies received more than a total $86.04 million in venture capital financing during the second quarter, according to a pair of quarterly reports issued in recent weeks.
How in much more is not known, since two of the companies would not disclose how much in capital they received – Comprehensive NeuroScience Inc. of White Plains, which assists companies in testing and bringing new drugs to market, and Swissray International Inc., a developer and manufacturer of digital X-ray machines. Swissray was based in Elmsford during the second quarter, but has since moved to Elizabeth, N.J.
“Clearly, we’re seeing some pickup in activity compared to a few months ago. One still has to be cautiously optimistic, however,” said Roger Savell, audit partner with the venture capital advisory group of Ernst & Young L.L.P.
“It’s too early to make any definite calls with respect to the trends. There seems to be some real activity happening in the market. Hopefully, it will show in the numbers for the third quarter,” Savell said.
One reason for the second-quarter upsurge in activity, Savell said, was because investors were more willing during the second quarter to “restart” or refinance early stage companies that blew through past financing – but only after lowering their valuations of those businesses.
More than half the capital recorded for Westchester businesses during the second quarter – $55.3 million – was received by a single company, Acorda Therapeutics Inc. The Hawthorne biotechnology company has said it will use the money to complete Phase 3 clinical trials of its Fampridine-SR on patients with chronic spinal cord injury. The financing will also allow Acorda to carry out Phase 2 trials of Fampridine-SR on people with multiple sclerosis.
Acorda’s $55.3 million in financing came in a third major financing round led by Eason Hunt Capital Partners L.P., which has offices in New York City and Florida. Eason Hunt led. a team of major investors that includes ABN AMRO Capital of Amsterdam, Netherlands, Cross Atlantic Partners of New York City, JP Morgan Fleming Asset Management of New York City and Techno Venture Management of Boston and Munich, Germany.
Acorda was one of three Westchester biotechs to. receive VC money in the second quarter. The other two were an undisclosed Larchmont company that won $1.49 million, and Comprehensive NeuroScience Inc. of White Plains, which garnered an undisclosed sum.
The second-highest amount was the $26.5 million won by Sandbridge Technologies Inc., a White Plains semiconductor company whose reprogrammable chip system will let wireless customers use a single device to access all the world’s wireless standards, when the technology comes to market in the next year or so.
Sandbridge received several awards during the second quarter. The largest was a $19.5 million round in which three new investors – China Development Industrial Bank, Doughty Hanson & Co. and Infineon Ventures – joined first-stage investors, Bessemer Venture Partners, Atlas Venture, and Columbia Capital. Sandbridge also received $4 million from a group of investors led by Castile Ventures of Waltham, Mass., and $3 million from Siemens Venture Capital.
Third-highest was HR Technologies of Purchase. The Purchase developer of human resources software raised $2.75 million during the third quarter in a second round led by Zon Capital Partners, a private equity fund headquartered in Radnor. Pa. Other investors included Cross Atlantic Capital Partners of Radnor, Pa. and Early Stage Enterprises of Skillman. N.J.
PriceWaterhouseCoopers co-conducted the Money Tree Survey along with Venture Economics and the National Venture Capital Association, which represents more than 450 VC and private equity organizations.
Its results for Westchester contrast with the mere half-million dollars and two deals – one by an undisclosed company recorded during the second quarter of 2002.
Westchester is within MoneyTree’s New York region, which includes Connecticut and New Jersey. Throughout the entire region, venture financing stabilized but still dipped year-to-year, to $189.56 million from $190.85 million. The number of deals during the period also dipped, to 22 from 27.
The Money Tree Survey found that nationally, the volume of venture capital financing rose for the first time following a year of quart quarter-to-quarter declines. But the $4.3 billion recorded for the second quarter nationally was still well below the $6.06 billion raised during the second three months of last year. The number of deals fell to 669 companies from 829 during the second quarter of 2002.
E&Y/VentureOne recorded $504.23 million in metro-area deals compared with $346.15 million a year ago, even though the number of deals actually dipped from 43 to 40 during that period. Nationwide, just under $4 billion was invested in 442 deals, compared to $5.7 billion in 594 deals in the final three months of 2001.
Copyright Westfair Communications Aug 18, 2003
