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Philadelphia catching up in venture capital

March 9
1:07 AM 2016

The year 2015 was a bit discouraging for Philadelphia in terms of venture capital (VC) funding as the fifth largest city in the US has attracted venture capital investment less than its due share of total funding. Philadelphia Association for Capital & Technologies, however, sees encouraging industrial activity as venture capital investment picks up.

The latest data from National Venture Capital Association reveals that Philadelphia was at seventh position in number of venture capital investments to local companies during 2015. The city was ranked at 13th position in venture capital funding volume. In total, Philadelphia attracted $540 million venture capital investment in 93 companies.

Philadelphia is the fifth biggest Metropolitan Statistical Area (MSA) by population in the US and largest city in the Commonwealth of Pennsylvania. Philadelphia Association for Capital & Technologies considers the current situation as optimistic and encouraging for Philadelphia's industry. It sees a positive view in 2015 as the previous year witnessed marginal growth when compared to 2014, according to Philly.com

Dean Miller, President of Philadelphia Association for Capital & Technologies, said "The deal count is higher compared to some previous years. Our region is on the rise in terms of entrepreneurial activity and investment."

Allaying notion that Philly doesn't have funding sources, BizPhilly has reported surge in venture capital investments in the area. MissionOG, PeoopleLinx, Solovis and Journey Sales received venture capital investments recently. 

BizPhilly further adds that MissionOG closed its first round and has $35 million under management. The Center City-based company invests $500,000 to $3 million in business startups like Cloudamize, OneTwoSee and PeopleLinx. The company is planning to invest in four more startups this year. It's expected that Philly-based companies will also figure in this investment plan. Out of the 11 companies in MissionOG's portfolio, five are Philly-based companies.

Meanwhile, Philadelphia-based medical technology companies are doing very well in attracting considerable share in venture capital investments. Photosonix Medical, another startup, recently closed $1.5 million seed round by Princeton Biopharma. Wearable tech startup Active Protective on the other hand, recently closed $2.4 million second round of funding while Velano Vascular has raised $3.5 million funding from a group of investors including Children's Hospital of Philadelphia.

Apart from those, ZSX Medical, a pre-clinical stage medical device company, has also closed $1.5 million round of investment. Analysts and industry experts consider this as a win for Philadelphia's medical technology community. Otherwise, these companies face unprecedented investment hurdles from Federal regulators. Still, it's a biggest risk than ever before to invest in companies, which are subject to FDA approval, as reported by Philadelphia Business Journal.

PwC's recent report puts Philadelphia on a strong note in venture capital investments in medical technology space. Philadelphia is a market with a number of healthcare providers. However, some analysts consider that the market is not as strong as it seemed.

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