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VCs Turn to Late-Stage Devices

To date, 2006 has seen a marked uptick in large financings by late-stage device start-ups. Average amounts raised in Series C and later deals has climbed steadily to over $22 million from just under $15 million in 2003, and an unprecedented ten device firms have raised $30 million or more in single deals so far this year.

As noted elsewhere in this issue (see "The Lure of Late-Stage Device Investing," in this issue [A#2006900211]), 2006 has seen a marked uptick in large financings by late-stage device start-ups. Average amounts raised in Series C and later deals has climbed steadily to over $22 million from just under $15 million in 2003, and an unprecedented ten device firms have raised $30 million or more in single deals so far this year (see Exhibit 1).

Some of this can be explained by simple risk-aversion: time-to-market in devices has always been shorter on average, and approval rates higher, than in the device sector's leading competitor for...

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