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Chicago's VC funding plunges 42.6 percent
Venture capital funding for Chicago-area startups in 2012 plunged 42.6 percent, and the number of companies funded dropped 12 percent from the previous year, according to a report that tracks innovation funding.
The amount invested dropped to $746 million in 2012 from $1.3 billion in 2011 as the number of companies funded fell to 111 from 128, according to the quarterly report, called the Illinois Innovation Index. The index is compiled by the Illinois Science and Technology Coalition, the Chicago Metropolitan Agency for Planning, the Chicagoland Chamber of Commerce and World Business Chicago, along with the Illinois Innovation network.
The report cited bright spots, however, including the fact that the majority of the money went to a handful of companies, indicating a concentration of startups with strong business models and management teams. More than half of the $746 million in VC funding — 55 percent — went to 10 businesses.
The percentage of companies receiving early-stage and seed-stage funding, defined as up to $1 million, also edged up slightly, to 20 percent in 2012 from 19 percent in 2011.
The share of second-stage investments from $1 million to $4.9 million increased from 32 percent of the total in 2011 to 43 percent in 2012.
The top five recipients of VC funding in 2012 were: Elevance Renewables Science of Bolingbrook, with $104 million in 2012 and a two-year total of $207.5 million; Braintree Payment Solutions of Chicago, with $35 million in 2012 on top of $36 million in 2011; Coskata, a renewable energy company in Warrenville, with $8.9 million in 2012 and $49.6 million in 2011; Naurex, an Evanston-based company developing drugs for depression that obtained $38 million in VC money in 2012 in addition to $18 million in 2011, and Oak Brook-based Internet, TV and phone provider Access Media 3, with $30 million in VC funding.