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What jumped in Chicago last quarter? Care to venture a guess?

Thursday, January 23, 2014  
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By John Pletz, Crain's Chicago Business


Venture capital funding in Chicago surged 48 percent in the fourth quarter to $219 million from the previous three months, the first time that quarterly investments in startups have topped $200 million in more than two years.

Funding in the quarter was 60 percent higher than in the same period a year earlier. But the strong finish wasn't enough to overcome a dismal first half. First-quarter investment was just $29 million, and second-quarter funding was $52 million, according to data from Dow Jones VentureSource. In the fourth quarter of 2012, venture funding was $132 million.

There were 24 deals in the fourth quarter, down from 27 in the prior quarter but up from 21 a year before. For the full year, there were 80 deals, relatively flat from 2012 and 2011.

The largest reported deal in the quarter was $45 million in SMS Assist LLC by Pritzker Group Venture Capital, followed by a $36 million investment in bio-ag company Chromatin, led by Wood Creek Capital, a unit of Mass Mutual.

Nationally, venture funding rose 2 percent to $8.89 billion from the third quarter and up 7 percent from the year-ago period, Dow Jones VentureSource said.

Illinois companies saw venture funding drop 23 percent for the year, to $433 million from $564 million in 2012, according to CB Insights, a New York-based venture database. The number of deals slipped to 66 from 72. The largest deals involved Chicago companies Cleversafe, which took in $55 million, SMS Assist's $45 million and BrightTag, which took in $27 million in financing.

CB Insights said Illinois ranked eighth in venture funding, while the number of venture deals nationally in 2013 hit a five-year high of 3,354. IPOs of venture-backed companies increased 55 percent nationwide with 73 companies going public, including Deerfield-based Textura Corp., Itasca-based Gogo Inc. and Vernon Hills-based CDW Corp.

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