Arizona venture capital up in 2005

February 10, 2006

By hammersmith

In 2005 Arizona venture capital had its best showing in three years, and its highest levels of biotechnology and pharmaceuticals VC ever. However, the final figures showed the state still has a long way to go to become competitive with leading states.

Arizona companies raised more than $147 million in 26 deals, according to the MoneyTree Survey released by Pricewaterhouse Coopers, Thomson Venture Economics, and the National Venture Capital Association. Four companies, including two bioscience companies, raised more than $23 million in the fourth quarter of 2005.

According to a similar survey by Ernst and Young LLP and VentureOne, Arizona companies raised $165 million in 2005. That number is a 115 percent increase over the 2004 figure of $77 million.

Ernst and Young also reported that $61 million of Arizona’s 2005 venture capital went towards health care. That total is $3 million more than the information technology sector received. In 2004 information technology received $59 million in venture capital, about 77 percent of the year’s total.

Despite the strong showing, Arizona still has room for improvement. Of the $5.1 billion invested nationally, Arizona only captured 0.7 percent of the funds.

The two bioscience-related companies that received venture capital in the fourth quarter are:

  • ImaRx Therapeutics, a Tucson based biopharmaceutical company. ImaRx received a seventh round of $15 million.
  • Ulthera Inc., a Mesa company that develops ultrasound therapy for the cosmetic surgery market. Ulthera received a first round of $5.5 million.

Final 2005 data for biotechnology and pharmaceuticals venture capital is expected to double the 2004 performance, which had been the state’s best year ever at nearly $20 million.

For more information:

Ariz. venture capital up in ’05,” Arizona Republic, 01/24/2006

Venture capital rises in state, but trails other regions,” Business Journal, 01/30/2006

Bioscience Roadmap Investment and Capital Formation Committee