Elsewhere on this site I’ve argued that 2014 was a curse-reversing year for Boston tech, thanks to a string of wins—among them major IPOs, acquisitions and strong growth for myriad startups.
Here I’d like to offer some data that I think supports that thesis, courtesy of the 2014 venture capital funding report from CB Insights.
The report shows that Massachusetts companies raised $4.2 billion in venture capital last year, up 37 percent from a year earlier (when the state raised $3 billion) and easily the most for Massachusetts since CB Insights began putting out these reports in 2009.
The number of deals in the state also grew, by 9 percent, to 346.
Tech vs. biotech
Since we mainly cover technology (software/hardware) at BostInno rather than biotech, I broke out how much of last year's venture activity was actually in the high-tech sphere. And what I found was very interesting: tech is now just as large of a contributor to venture funding totals in Massachusetts as biotech.
• Both healthcare/biotech and tech* saw $1.93 billion raised in VC funding in 2014 (each taking 46 percent of the state’s total).
• That’s also interesting because, previously, healthcare was clearly dominant in its share of the venture capital funding pie in Massachusetts; in 2013, healthcare took 46 percent of total funding compared to 40 percent from tech.
• Tech funding shot up 61 percent last year compared to 2013 ($1.93 billion vs $1.2 billion).
• Tech deals increased 16 percent last year, to 221 deals, from 191 deals the year before.
Boston is not just “that place that’s good at biotech.”
None of this is meant to suggest that healthcare is any less important in Massachusetts—just that no one should think of the region as “that place that’s good at biotech.” Clearly, some venture capital investors believe Boston is a lot more than that.
Major deals for the year in tech included $100 million for Actifio, the Waltham maker of software for managing data copies, which valued the firm at $1.1 billion; $57 million for Cambridge's SimpliSafe, maker of a next-gen home security system; and $50 million for Acquia, the Burlington-based provider of products, services and technical support for the open-source Drupal content management system.
Where the deals are going
Meanwhile, the CB Insights report highlights another trend in Boston’s startup scene—the migration of companies to the City of Boston itself. The report shows that Boston once again saw the largest number of deals in 2014, with 103, compared to 92 in Cambridge (which for years had been dominant in that regard). The next top communities were Waltham (26), Burlington (10) and Woburn (nine).
* Defined as Internet, mobile/telecom, other software, hardware and electronics.
Read more on our special micro-site: Boston Tech in 2014
