This Year’s Top 10 Largest Venture Funding Deals
october 20, 2009 - Twitter Inc.’s $100 million funding round drew considerable attention for its massive size, but it’s not the largest venture deal so far this year. That round actually tied for the fourth largest, according to data compiled from Dow Jones VentureSource.
Here’s a list of the Top 10 venture capital rounds through the third quarter. The deals are impressive considering the cloud hanging over the venture industry. Besides Twitter and another dot-commer, Facebook Inc., these companies range from massive clean-technology projects and health-care plays to wireless equipment makers and, in one case, a waste-collection service.
#1 Solyndra Inc., Fremont, Calif. - $286 million
The solar panel maker is on the federal government’s hot-list, receiving a $535 million loan guarantee in September to build a second manufacturing plant and create hundreds of jobs. That loan encouraged venture firms to invest at least another $198 million in Solyndra. (The company announced that amount in September though a spokesman told VentureWire the round’s total was even higher.) Argonaut Private Equity, an investment vehicle for Oklahoma billionaire George Kaiser, led the round. Others participating in the round weren’t disclosed, although Solyndra’s investors include CMEA Capital, Redpoint Ventures, RockPort Capital Partners, U.S. Venture Partners and Virgin Green Fund, which together have invested more than $600 million. Solyndra plans to finish building its plant in Fremont by the end of next year and ship its first product in early 2011.
#2 Clovis Oncology Inc., Boulder, Colo. - $146 million
In May, Domain Associates, New Enterprise Associates and others bet $146 million that former executives of cancer-drug company Pharmion Corp., which sold for $2.9 billion last year, will repeat that success with newly formed Clovis Oncology. Also participating were Pharmion investors Aberdare Ventures, Abingworth Management, ProQuest Investments and Versant Ventures, and newcomer Frazier Healthcare Ventures. Like Pharmion – which raised $145 million in venture capital and convertible debt before going public in 2003 – Clovis will acquire cancer therapies, develop them through to regulatory approval in the U.S. and Europe, and market them.
#3 Small Bone Innovations Inc., New York - $108 million
The orthopedic device company, founded in 2004, has developed a portfolio of products for thumb, hand, wrist, elbow, foot and ankle surgeries. The STAR Ankle total joint replacement system, one of Small Bone’s flagship products, received Food and Drug Administration clearance in May. The $108 million Series D round, which closed in April, included new investors The Family Office of Bahrain, Goldman Sachs & Co., Khazanah Nasional Brhd. and Malaysian Technology Development Corp. and existing investors 3i Group, Axiom Venture Partners, NGN Capital, TGap Ventures and Trevi Health Ventures. Executives told VentureWire they expect Small Bone to reach profitability in 12 months, and unlike many medical device companies which become acquisition targets, could grow into a full-fledged company in its own right.
#4 (Tied) A123 Systems Inc., Watertown, Mass. - $100 million
The electric-car battery maker’s initial public offering last month captured investors’ imagination – and wallets - with a vision of a future where power is stored intelligently and deployed efficiently in a world of lower carbon emission. Before the IPO, A123 Systems gathered $100 million in Series F funding in June from investors Gururaj Deshpande, General Electric Co., North Bridge Venture Partners and Qualcomm Inc. A123 also received a $249.1 million grant from the U.S. Department of Energy grant, the second-biggest awarded as part of a $2.4 billion program to start up a domestic battery industry. The company, which has a deal to supply Chrysler Group LLC with batteries for planned electric vehicles and hybrids, is said to be in the late stages of negotiations for another DOE loan worth as much as $235 million.
#4. (Tied) Facebook Inc., Palo Alto, Calif. - $100 million
Facebook recently reached an important milestone for an Internet company, becoming cash-flow positive as it also grabbed its 300 millionth member. Will an IPO be coming soon? Executives won’t say, but the company’s investors are counting on a spectacular exit at some point given how much money they’ve invested over the years. One of the newest investors is Digital Sky Technologies, a Russian Internet investor that put $100 million into Facebook in July while also paying another $100 million to buy out shares of any selling employees.
#4 (Tied) Open Range Communications Inc., Greenwood Village, Colo. - $100 million
One Equity Partners committed $100 million to Open Range at the start of the year to help it roll out wireless broadband and Internet services in rural America by the end of the year. The deal followed a $267 million loan from the U.S. Department of Agriculture’s Rural Development Utilities Program. Founded in 2004, Greenwood Village, Colo.-based Open Range hopes to reach more than six million Americans in 546 underserved and rural communities across the U.S. lacking access to traditional DSL or cable broadband service providers. Open Range plans to use WiMAX technology to enable access to its planned wireless service with a simple plug-in device.
#4 (Tied) Twitter Inc., San Francisco - $100 million
At a $1 billion valuation, Twitter’s $100 million fourth round proved the Web messaging company is here to stay, at least longer than some thought. The funding came from some unlikely sources, including T. Rowe Price Group, better known for its retirement funds than venture capital investing, Morgan Stanley, which invested from its asset management business, and Insight Venture Partners, a growth-equity investor that doesn’t typically put money in pre-revenue companies. Other investors in Twitter include Benchmark Capital, Institutional Venture Partners, Spark Capital and Union Square Ventures, which didn’t reinvest in the latest round reportedly because the deal priced the firm out. Now the pressure will be on for Twitter to live up to the hype.
#4 (Tied) WastePro USA Inc., Longwood, Fla. - $100 million
One man’s trash is another man’s treasure. “I love the garbage business,” Jeffrey Keenan, president of Roark Capital Group, told VentureWire when the firm announced its investment in WastePro in September. That reverence for refuse led Keenan and Roark to invest $100 million in equity in the profitable Southeast U.S. waste collection company. WastePro plans to continue expanding by bidding on municipal waste contracts - it has about 80 so far - and may make some add-on deals. WastePro serves more than 825,000 residences and 32,000 businesses across Florida, South Carolina, Georgia and Alabama.
#9 Meru Networks Inc., Sunnyvale, Calif. - $87 million
The Wi-Fi equipment maker has now raised more than $180 million since it was founded in 2002 to help organizations connect everything wirelessly. Meru, which faces competition from companies like Cisco Systems Inc. and Aruba Networks Inc., says its Wi-Fi equipment is different from others that use a hub architecture, meaning the devices that connect to the network determine how much bandwidth they take, which makes it difficult for many devices to access the network at a given time. Meru’s equipment uses virtual ports which give control of the network to a network administrator. Meru told VentureWire in April it has about 2,500 customers mostly in health care and education, in more than 30 countries. Investors in the Series E round from April include BlueStream Ventures, Clearstone Venture Partners, D.E. Shaw & Co., Evercore Partners, Monitor Ventures, NeoCarta Ventures, Tenaya Capital and Vision Capital Advisors.
#10 Fisker Automotive Inc., Irvine, Calif. - $85 million
Not long after Eco-Drive (Capital) Partners and Kleiner Perkins Caufield & Byers invested $85 million in Fisker in April, the luxury electric-car developer received a $528 million in low-cost loans under the U.S. Department of Energy. The funding will help Fisker finalize the development of its luxury plug-in hybrid Karma vehicle, and support the engineering and manufacturing of Fisker’s lower cost “family-oriented” plug-in hybrid car, slated for 2012. Just today Chief Executive Henrik Fisker said the company will soon announce the U.S. site where it plans to build its $48,000 family plug-in electric hybrid. The company reached a deal to build an estimated 100,000 cars annually of the yet-to-be-named model at a refurbished plant in the U.S., Fisker said at an entrepreneurs conference in Washington. The Fisker Karma, an $89, 000 luxury hybrid being built in Finland, is expected to hit the U.S. market next summer.