Venture capital investments rebound in state

Seattle metro area startups received $550.8 million in venture capital in the second quarter of this year — their highest amount of quarterly investment since late 2007, according to a report by Dow Jones VentureSource being released Saturday.

A $315 million investment in Liberty Dialysis, a health care services company on Mercer Island, inflated the number slightly, cautioned Tim Tasker, a venture capital expert with Ernst & Young.

Washington ranked third out of all states in terms of money raised, following California and Massachusetts, respectively, according to data from the Dow Jones VentureSource second-quarter report.

The VentureSource report culls data with a different methodology than the MoneyTree Report published Friday by PricewaterhouseCoopers and the National Venture Capital Association. The MoneyTree report said Washington companies received $187.4 million during the quarter.

Nationally, VentureSource said investors handed out $7.7 billion in 744 deals in the second quarter, up 26 percent from the second quarter last year. (The MoneyTree report pegged the figure at $6.52 billion.)

Healthcare companies raised the highest amount, $2.7 billion, a 13 percent increase from the same quarter in 2009. There were 201 deals finalized in the health care industry, ranking behind only the information technology sector.

IT saw a 24 percent jump in deals from the first quarter, moving from 186 to 231. IT raised $1.9 billion, the second-highest amount.

"Deal activity and capital invested in venture-backed companies is once again near levels seen before the start of the economic recession," Jessica Canning, global research director for Dow Jones VentureSource, said in a release.

Healthcare industries (including the Liberty Dialysis investment) received the largest amount in the Seattle metro area during the quarter, with $430 million. IT saw the second-highest total, with an investment of $40.5 million spread over seven total deals, jumping 523 percent from the first quarter total of $6.5 million.

Deals are occurring in the Seattle area with an encouraging velocity, Tasker said. "There's still a lot of money flowing," Tasker said. "We're cautiously optimistic that the trend will continue."

Jason Bacaj: jbacaj@seattletimes.com