News Column

Orlando area leads state in venture capital

July 21, 2014

By Richard Burnett, Orlando Sentinel



July 21--Buoyed by a mobile communications software company's lucrative deal, Central Florida claimed more than half the state's venture-capital trove during the latest quarter, though Florida's overall total fell by nearly a third, according to a new nationwide survey.

Local companies received nearly $62 million during the second quarter, led by Orlando-based Kony Inc. The company attracted a total of $50 million from a half dozen investment firms, including Japanese giant Softbank Capital Partners, according to the MoneyTree Report.

Other Orlando companies landing deals in the quarter included PowerDMS Inc. (cloud-based document management software, $5.3 million) and XOS Digital Inc. (Web-based editing software for sports video, $5 million). The list also included Windermere-based FlexReceipts LLC (retail digital-receipts technology, $1.4 million).

The Orlando area has led the state's venture-capital race only a few times in recent years, according to MoneyTree data.

Orlando would have trailed South Florida and the Tampa-St. Petersburg area during the second quarter without the deal involving Kony.

Founded by entrepreneur Raj Koneru in 2007, the fast-growing company employs 100 in Orlando in the development of mobile platform software for major corporations. The "one-stop" software tools enable companies to build their own mobile apps automatically configured to work on any wireless device.

Central Florida's second-quarter total nearly tripled that of South Florida -- usually the state's dominant venture capital region, the survey stated. A half dozen companies in the Miami-Fort-Lauderdale-Palm Beach area received a total of $25 million.

Statewide, Florida companies received $113 million from more than a dozen deals in the period, down 32.7 percent from the 2013 quarter, figures show. Nationwide, Florida ranked 14th in the second quarter, while California ($8 billion), Massachusetts ($1.15 billion) and New York ($1.05 billion) led the way.

Nationwide, venture-capital investment rose 34 percent in the quarter to $13 billion, the largest total since the first quarter of 2001, according to MoneyTree. The report is published by PricewaterhouseCoopers and the National Venture Capital Association, based on Thomson Reuters data.

Jamie M. Grooms, a venture-capital expert in Gainesville, said Florida's investments often fluctuate because of the internal timing and funding cycles of the venture capital firms that do business here. Florida also has a way to go before it has a "critical mass" of investment-worthy companies similar to what's found in San Francisco and Boston, he said.

"Our pipeline of companies isn't deep enough yet to attract large numbers of the big venture-capital firms," said Grooms, chief executive officer of the Florida Institute for the Commercialization of Public Research, which works with UCF and other state universities in creating startup companies.

"We're definitely seeing more and more companies in the pipeline," he said. "And as they develop and mature, they'll attract more venture capital, which will help flatten out those fluctuations we see in the survey."

rburnett@tribune.com or 407-420-5256

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(c)2014 The Orlando Sentinel (Orlando, Fla.)

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Source: Orlando Sentinel (FL)


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