Healthcare tops the list for 2011 Texas startup investments at $863M
27th January 2012 · 0 Comments
The Texas Entrepreneur Networks Startup Funding Report represents the equity investments made into Texas startup and early stage companies for 2011 with additional analysis on the fourth quarter of 2011.
2011 Trends in Sectors
Overall the leading category for funding sector in 2011 was Healthcare at $863M due both to a high number of deals (66) and to the several large investments such as SourceHOV at $645M in the North Texas region. Biotechnology followed with 45 deals at $474M where both high deal flow and a large investment, Reata Pharmaceutical which raised $300M pushed it up the list. Digital Media came in third with 66 deals and $469M in funding.
2011 Trends in Regions
The North Texas region came in the highest for funded deals in 2011 due to high deal flow and the presence of two large investments, SourceHOV ($625M) and Reata Pharmaceuticals ($300M). Central Texas comes in second with $952M followed by the Gulf Coast at $295M. In terms of deal flow, Central Texas is number one at 184 deals followed by the North Region at 116 and the Gulf Coast at 68. The average raise for a deal is $5M (In the North Region this number is skewed upwards by the two large investments).
4th Quarter comments
Overall Digital Media is the leading sector for funding in the 4th quarter with 28 deals valued at $256M. Central Texas is the leading region with $281M and North Texas at $148M.
Texas Startup Investment Trends
Capital efficient deals are the ones that continue to receive funding. The number of deals continues to increase while the dollar value of each deal continues to decrease. Syndication of deals continues to grow to include more investors and more types of investors. It’s not unusual to see individual investors, angel investors, venture capital, and family fund investors all in the same deal round.
Texas Startup Investment Forecast
There will be an increasing number of investors and entrepreneurs seeking investment from out of state regions. The Midwest and Southeast are two areas from which investors and deal flow come to Texas. Valuations and deal flow will increase in the top sectors such as healthcare, information technology, and mobile applications.
Business Filings
Business filings of new entities in the state of Texas in the 4th quarter reached 15,631 with North Texas at 36%, the Gulf Coast at 28%, and Central Texas at 19%, and South Texas at 12% and West Texas at 5%. This is down from 24,059 in the 3rd quarter and is a normal seasonal decline due to a focus in the 4th quarter on termination and merger filings rather than new business filings.
TxEN Funded Companies
Deals going through the TxEN Funding Forum series raised over $11M in 2011
Tags: Early Stage Companies, Startup Funding, Texas Entrepreneur Networks, Texas Equity Investments
