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Sonoma County venture capital funding dries up in 2011

In this 2008 photo, Enphase Energy engineers work in the research and development laboratory at the company's Petaluma facility.

File Photo / Press Democrat
Published: Monday, January 30, 2012 at 5:11 p.m.
Last Modified: Monday, January 30, 2012 at 5:41 p.m.

Venture funding for Sonoma County technology startups fell in 2011, as a shaky economy made investors skittish about early-stage companies.

Local startups raised just $67 million last year, compared to $200 million in 2010.

The year ended on a down note, with a fourth-quarter dip in the number of U.S. deals and dollars invested, said Jessica Canning, research director for Dow Jones VentureSource, which tracks private equity.

Startups found it tough to raise money amid a tepid market for initial public stock offerings, she said.

“Venture capitalists reset their expectation for the exit market, and entrepreneurs adjusted their companies' valuations to suit the current climate,” Canning said.

In Sonoma County, venture deals have declined steadily in recent years as startups went public or got acquired, pushing them out of the market for private equity.

Sonoma County's emerging tech companies raised just $23 million in venture capital during last year's second half.

Petaluma optical communications startup Cyan brought in $10 million from investors. The 6-year-old company designs and sells broadband equipment, software and services to phone, cable and Internet service providers.

Enphase Energy, which develops solar energy technology, raised $8 million in private equity in the same period. The Petaluma startup makes microinverter technology that boosts the output of solar power systems.

Enphase, founded in 2006, plans to go public with an initial stock offering worth up to $100 million, but it hasn't set a date.

Santa Rosa biotech startup Claret Medical raised $3.4 million. The 2-year-old business is developing a medical device for preventing strokes in heart patients.

Petaluma greentech company HydroPoint Data Systems garnered $1.4 million during the period. Founded in 2002, HydroPoint makes web-based technology for controlling irrigation systems.

Investors put nearly $33 billion into startups last year, VentureSource said. The medical sector led the fund-raising, followed by information technology, consumer web startups, business and financial services and renewable energy.

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