Venture funding in Connecticut fell sharply again during the second quarter, putting the state well behind last year's investment pace.
In all, venture capitalists injected about $13.5 million into Connecticut companies during the second quarter of 2011, a 45 percent decrease from the $24.6 million invested in the year-ago period.
That sum represents 11 deals, compared to 16 deals a year ago, according to the latest MoneyTree report, a joint effort of PricewaterhouseCoopers and the National Venture Capital Association. The data was provided by Thomson Reuters.
Nationwide, venture capitalists invested $7.5 billion in 966 deals in the second quarter of 2011. Quarterly investment activity increased 19 percent in terms of dollars compared to the first quarter of 2011 when $6.3 billion was invested in 814 deals.
Nationally, the quarterly investment level represents the highest total in a single quarter since the second quarter of 2008.
There were no major deals in Connecticut, with the highest funding of $3.2 million going to Norwalk-based Zadspace, Inc., a former California-based startup company that recently moved its headquarters to Connecticut. Zadspace's proprietary software enables retailers to affix highly targeted and personalized 4-inch by 6-inch color labels onto packages shipped to consumers. The company received funding from Connecticut Innovations, DFJ Frontier, Crosscut Ventures and The Gideon Hixon Fund.
Biotechnology company Cara Therapeutics Inc. scored the second biggest deal, getting $3 million from a consortium of investors including Connecticut Innovations. The Shelton-based company develops therapeutics to treat human diseases associated with pain and inflammation.
Two Greater Hartford companies also got a piece of the action. West Hartford IT company ADmantX, which provides web service for online advertising, received $2.8 million in funds, while Farmington-based Innovatient Solutions Inc., which builds patient care management software for the healthcare industry, received $1 million in funding.
In Connecticut, the software sector saw the most funding in the quarter, with five deals worth $3.5 million. Biotechnology, IT services, and consumer products and services received the next largest chunks of cash, raking in $3 million, $2.8 million, and $2.5 million respectively.
Nationally, the software industry received the highest level of funding for all industries with $1.5 billion invested during the second quarter of 2011. The software industry also had the most deals completed in the second quarter with 254 different companies getting investments.
Meanwhile the life sciences sector, which includes biotechnology and medical device industries, saw 37 percent increase in venture funding, with $2.1 billion going into 206 deals.
Connecticut's financial services sector posted more job openings in the second quarter of 2011 than it did a year earlier, but job growth in one of the state's key industries remains stagnant.
Financial companies in the state, including insurers and banks, posted 1,608 job openings during the second quarter of 2011, a double-digit increase from the year ago period, according to an occupational outlook report recently published by the Connecticut Insurance & Financial Services (IFS) Cluster, in partnership with SkillPROOF Inc.
The study monitors and reports on the hiring demands of 49 insurance, banking and financial services companies in Connecticut by tracking job postings via their Internet websites.
Insurance jobs — including actuaries, underwriters and claims processors — had the highest gains in job postings, with 750 listings in the second quarter, a 23 percent increase from a year ago. The financial services sector, which includes financial advisors, analysts and business analysts, posted the second biggest jump in postings of 10 percent with 466 postings. Banks posted 392 job openings during the second quarter.
But, those increased postings don't mean financial services companies are hiring like gang busters in Connecticut.
According to the report, employers are still cautious about hiring and are liable to wait to add employees. They cite the uncertain economy, high unemployment, and continued uncertainty surrounding the state budget situation as reasons.
As a result, in a month-to-month comparison, labor market indicators including internet job postings and IFS payroll are weaker than anticipated with no growth or slight declines, the report said.
Employment in financial services companies fell slightly in June, and total employment in the financial sector in Connecticut is 133,700, down about 1 percent from this time last year.
Greg Bordonaro writes the Financial Sense column every other week. Reach him at gbordonaro@HartfordBusiness.com.