Strong year shaping up for venture capital in U.S., Minnesota

Venture capital raising appears headed for another strong year both nationally and in Minnesota.

Venture capitalists around the country invested $15.3 billion in 961 deals in the second quarter, according to the MoneyTree Report from Pricewaterhouse- Coopers and the National Venture Capital Association, based on data provided by Thomson Reuters.

Minnesota ranked 10th in the country, raising nearly $118 million in the April-June quarter.

For the 10th consecutive quarter, venture investment into "innovative" start-up companies has surpassed $10 billion, helped by the fact that 10 or more companies raised "mega rounds" of $100 million or more, according to PwC.

In Minnesota, seven companies across several industries raised $172.7 million in the first half of 2016.

"In the first six months of the year, Minnesota is up 49 percent from last year, and last year was a strong year: the second highest total year since the MoneyTree report started in 1995," said Mark Scholtes, a Minneapolis-based PwC partner who analyzes the national data. "The first two quarters of this year are continuing that trend.

"There was balance among industries, including medical devices, health care services, energy, financial services … and that's an indicator of a strong environment.

Venture capitalists infuse money into young companies, often before they sell stock to the public or are acquired by private equity firms or larger operating companies. The recipients in the first half included TenKsolar ($25.2 million), Zipnosis ($14 million), and Bite Squad ($5 million).