The slowdown in venture investments in risky startups has yet to hit New England.
Local startups raised nearly $1.6 billion in venture capital in the first quarter of 2016, an increase of more than 13 percent from a year earlier. That’s in contrast to other parts of the country, where the amount of new investments in startups declined during the period, according to a new report from the National Venture Capital Association.
In Silicon Valley, where startups still receive the largest share of venture capital, total investments during the first quarter declined more than 19 percent, to $4.9 billion. Nationwide venture investments decreased 11 percent.
The data come from the MoneyTree Report, produced by the NVCA and PricewaterhouseCoopers LLP. The authors said the national slowdown was tied to fewer checks being written by “nontraditional” venture investors, such as hedge funds and mutual funds.
A sluggish market for initial public offerings, which allow venture capital firms to reap the rewards of early investments, also could be having an effect. The first three months of 2016 was the slowest quarter for American IPOs since the financial crisis of 2008-09, with only eight public offerings raising about $700 million total, according to investment firm Renaissance Capital.
But in New England the biotech sector continues to be the darling of venture investors; it received $820 million in new investments in the quarter, an impressive 39 percent increase over the prior year’s period.
Those startups are attractive to investors because major pharmaceutical companies are striking drug-discovery deals with them, said Daphne Zohar, chief executive of Boston biotech company PureTech Health PLC.
“Sixteen of the top 20 pharma companies now have a base in Massachusetts, and they are all thirsty for new products,” Zohar said. “Good deals are still generating a tremendous amount of funding interest.”
Among the largest biotech deals in New England last quarter was a $61 million investment for Codiak BioSciences Inc., which is working with cell membrane sacs called exosomes to diagnose and treat cancer.
Another notable deal was the $45 million financing for Yumanity Therapeutics, developing treatments for ailments such as Alzheimer’s and Parkinson’s.
Only one of the region’s venture investments was large enough to be listed among the top 10 largest deals nationally, and that was for a technology, not a biotech firm: Fuze, a Cambridge-based developer of phone, text chat, and video conferencing software for businesses, received a $112 million investment round.
Curt Woodward can be reached at curt.woodward @globe.com. Follow him on Twitter @curtwoodward.