Week in Review: VC Data, Internet of Things and Successful Exits

Posted by | July 29, 2011

As another week draws to a close, we’d like to take a minute to look at some developments making their way around the Web and highlight some exciting Safeguard news.

A report released last week by the National Venture Capital Association (NVCA) and PricewaterhouseCoopers highlighted venture investment numbers for the second quarter of 2011. The report featured some notable findings:

  • Internet investing has hit its highest level in 10 years.
  • The Life Sciences sector saw an increase in VC dollars during the second quarter as well, increasing 37 percent in dollars and 12 percent in deal volume from last quarter.

Following this report’s release, NVCA President Mark Heesen stated that he believed that the industry should be “less concerned about a bubble and more concerned about being in a position to adequately fund the tremendous opportunities out there in the next decade.”

We might not be in a tech bubble, but we’re definitely seeing a lot of conversation in this space. In fact, over the past few weeks, the Internet of Things has gotten a lot of attention. Last week, it was listed as the #1 technology that will change the world in the next ten years by NetworkWorld. Even Cisco – who some believe makes the Internet go round – is getting interested in the subject. They are promoting an infographic that clearly illustrates the exponential growth of “things” connected to the Internet, cows included, which represents a significant opportunity innovation.

Finally, Forbes’ Dan Woods discussed the “potential of ‘big data’ and the massive explosion of sources” in his article published last week. In this article, Dan discusses the tool behind ThingWorx’s approach, known as SQUEAL (Search, Query, and Analysis).

Over the years, Safeguard has been on the forefront of change and innovation, which we reflected on while celebrating our 40th Anniversary trading on the NYSE. To commemorate this event, we rang the closing bell on July 14th. In light of this milestone, there are other great updates to share:

  • McKesson completed its acquisition of technology partner company Portico Systems on Tuesday. Safeguard expects to receive $38.1 million in aggregate cash proceeds from the sale, representing a 4x cash-on-cash return and a 36% IRR. You can read more about it here.
  • Safeguard released its second quarter 2011 financial results on Wednesday. Since January 2006, we’ve deployed nearly $268 million in capital and realized nearly $631 million through the sale of partner companies and private-equity holdings that represented transactions undertaken and value built by Safeguard’s current management team. The sale of partner companies Advanced BioHealing, Avid Radiopharmaceuticals, Clarient and Portico Systems to Shire, Eli Lilly, GE Healthcare, and McKesson, respectively, represents well-timed exits with top-tier multinational acquirers yielding cash-on-cash returns ranging from 3x to 13.5x.
  • We deployed capital into two new life sciences partner companies NovaSom and PixelOptics.
  • Our CEO Peter J. Boni was profiled in TechnicallyPhilly.com’s Friday Q&A series, where he discusses Safeguard’s recent successes and various factors that are driving technology company valuations significantly higher.

To read more of our “Week in Review” series, please use the following feed: www.safeguard.com/WeekInReview. Enjoy your weekend!

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