MountainWest Venture Group's annual Deal Flow Report
David L. Politis
Deseret Morning News
April 26 2004
For the eighth consecutive year, the MountainWest Venture Group has published its annual Deal Flow Report, a document chronicling monies raised by Utah companies during the previous calendar year through public offerings, venture capital/private equity (VC/PE) sources, other funding sources, and/or that completed merger or acquisition transactions.
This week's column will provide a summary of the report, particularly as it relates to Utah's high-tech and life science firms.
As expected, 2003 saw a continued decline in total funding activities versus 2002, dropping to $2.83 billion versus $3.33 billion in 2002, a 15 percent decline. (NOTE: 2001 saw the highest total raised in the state at $4.99 billion.)
Nevertheless, there was still a fair amount of funding activity that occurred in 2003 in Utah's tech/life science industries.
Unlike 2002, there were no initial public offerings in Utah's tech community last year. Nevertheless, Orem-based Q Comm International migrated from the Over-the-Counter Bulletin Board last year onto the American Stock Exchange and simultaneously conducted a public offering, which was its first public offering. But in the traditional sense, no Utah tech firm had an IPO last year.
Unfortunately, space constraints will not allow me to analyze all 2003 technology company fundings in this column, so I will focus the remainder of this piece to the 2003 venture capital/private equity activity in Utah.
For example, a total of 28 high tech companies in Utah raised $260.32 million in 2003 million from VC/PE sources, an average of $9.3 million per company.
This compares to $156.77 million raised by 31 Utah tech companies in 2002 through VC/PE or a total of $5.06 million raised per company funded.
In other words, roughly 10 percent fewer tech companies raised venture capital or private equity money in 2003 versus 2002. Nevertheless, those tech firms that did raise VC/PE money in 2003 raised approximately 83 percent more than their counterparts in 2002.
Additionally, 12 of Utah's high-tech companies raised VC/PE monies in both 2003 and 2002.
Of these 12 tech firms, two raised virtually the same amount both years: Altiris and FatPipe. Which leaves 10 firms.
Of these 10 companies, half raised more money in 2003 than 2002, while half raised less. On the low-end of the scale, LinuxNetworx raised 82 percent less money from VC/PE sources in 2003 versus 2002: $2 million versus $11.1 million, respectively.
On the flip side, of Utah tech firms that raised VC/PE money in both 2003 and 2002, the high-water mark was achieved last year by Northface University which landed 7.67 times the money in 2003 versus what it raised in 2002: $11.1 million versus $1.5 million, respectively.
Found below is an alphabetical listing of each Utah technology company that raised money in 2003 via a public offering or through a VC/PE source, including the city where the firm is based, the amount raised, and its Web address (if one exists).
Altiris, Lindon, $70.3 million, www.altiris.com
Overstock.com, SLC, $24.0 million, www.overstock.com
Q Comm International, Orem, $16.5 million, www.qcomm.com
Venture Capital/Private Equity:
Attensity, SLC, $12.0 million, www.attensity.com
Broadcast International, SLC, $1.3 million, www.brin.com
Browz Risk Services, Draper, $1.0 million, www.browzgroup.com
Cambric, Draper, $1.0 million, www.cambric.com
Cerberian, Draper, $3.4 million, www.cerberian.com
CleanFilms, West Jordan, $500,000, www.cleanfilms.com
Communitect, Lindon, $165,000, www.smilereminder.com
Control4, SLC, $4.8 million, www.control4.com
DriveSafety, Orem, $6.1 million, www.drivesafety.com
Echopass, SLC, $4.0 million, www.echopass.com
EReinsure.com, SLC, $5.0 million, www.ereinsure.com
FatPipe Networks, $3.0 million, www.fatpipeinc.com
First Choice Solutions, SLC, $4.5 million, www.firstchoiceusa.com
Forum Systems, Sandy, $17.5 million, www.forumsystems.com
Geolux Communications, Lindon, $1.4 million, www.geolux.com
Interact Devices, SLC, $300,000
Linux Networx, Sandy, $2.0 million, www.linuxnetworx.com
Neovest Holdings, Provo, $1.0 million, www.neovest.com
Northface University, SLC, $11.5 million, www.northfacelearning.com
NxLight, Lindon, $6.0 million, www.nxlight.com
ProPay, Orem, $2.7 million, www.propay.com
Property Solutions, Provo, $350,000, www.propertysolutions.com
SCO Group, Lindon, $50.0 million, www.scogroup.com
Sento, American Fork, $1.0 million, www.sento.com
STSN, Midvale, $9.0 million, www.stsn.com
This year, for the second time, I've also included in this annual column a breakout on monies raised by Utah companies that most accurately fit into the Life Sciences industries.
Here, as with the high-tech breakout above, I have only included those firms that either completed public offerings in 2003 or raised VC/PE monies during the year.
For the record, eight life science companies raised $229.16 million in VC/PE deals in 2003, which is dramatically higher than the $31.93 million in life science VC/PE deals in 2002.
However, the vast majority of this total ($192.0 million or roughly 83 percent) comes from one deal, a convertible debt offering by NPS Pharmaceuticals.
Interestingly, not counting NPS, an average of $5.31 million was raised by the other seven life science firms, an average roughly in line with their high tech counterparts.
NPS Pharmaceuticals, SLC, $192.0 million, www.npsp.com
Venture Capital/Private Equity:
Amedica, SLC, $8.4 million, www.amedicacorp.com
BioMicro Systems, SLC, $3.0 million, www.biomicro.com
MedQuest Products, SLC, $900,00 million, www.medquest-inc.com
Pharmadigm, SLC, $1.56 million, www.pharmadigm.com
Rubicon Medical, SLC, $17.0 million, www.rubiconmed.com
Salus Therapeutics, SLC, $300,000, www.salustherapeutics.com
TheraDoc, SLC, $1.0 million, www.theradoc.com
ZARS, SLC, $5.0 million, www.zars.com
For additional information on the 2003 Utah Deal Flow Report, you can visit www.mwvgutah100.org.