OC VC Deals Dip in 4th Quarter, but Up for Year

Venture capital deals for Orange County growth-stage companies took a year-end breather in the last quarter of 1999, totaling $126.8 million, down 40% from the third-quarter tally. But the total for the year reached $537.9 million,nearly double 1999′s $272 million.

The numbers are part of PricewaterhouseCoopers’ most recent Money Tree Survey, which tallies funding deals by the country’s most prominent venture capital firms. While the survey isn’t an exhaustive picture of venture activity, the quarterly report serves as a barometer for investment activity and industry trends.

The report comes on the heels of a similar survey by Venture Economics that reported $1.1 billion worth of funding in OC in 1999, compared with $400 million year before.

The two reports survey different VC firms and use different methodologies, leading to the discrepancy.

PwC’s $126.8 million figure is a dip from the $212 million raised by OC firms in the third quarter, but much of that record-breaking quarterly total was an unusually large $119.5 million funding of Irvine low-cost PC maker eMachines.

For the fourth quarter, VCers scattered their investments more broadly, funding 22 companies, compared with 17 deals in Q3.

Healthcare service companies took in the bulk of that money, raising $26.1 million, or 20%, in five deals. The county’s healthcare industry exerted its strength in other categories as well: two medical-device makers and an Internet services company geared toward doctors’ offices snagged VC deals

Business services, led by e-commerce companies specializing in the much-touted business-to-business segment, raised $24.8 million, or 19.6% of the total, in four deals.

Not surprisingly, tech-oriented companies in all industries dominated the VC deals, with investors backing everything from shipping firms targeting e-merchants to Internet-based customer-screening services for insurance underwriters.

Los Angeles County companies, meanwhile, raised $895.4 million in 53 deals for the quarter, and $1.82 billion for the year. That’s more than triple the previous year’s total of $513.3 million.

PwC’s list of OC companies funded in Q4 includes:

n CoCensys, Irvine, for $3 million in first-round funding. The company has developed a technology that screens new drugs.

n Go Ship, Laguna Niguel, for $1 million in seed funding. The company rates shipping companies for online merchants and allows customers to choose the method of delivery.

n National Water