SAN DIEGO—Increases in venture-capital funding in Q1, but decreases year-over-year, show that companies are having more success raising capital in San Diego, but are still struggling to raise capital for certain areas of VC investment, CBRE's first VP Andrew Huggett tells GlobeSt.com.

CBRE recently reported that total VC investment in San Diego firms was $248 million in Q1 2017, up 22% from Q4 2016, but down 52% from Q1 2016, according to data from the PwC/CB Insights MoneyTree Report and Mattermark. Deal volume was 33, which is considerably lower than the quarterly average of 50 deals.
For San Diego, this was a slower quarter compared to very strong investment from 2014 to 2016, when the quarterly average was $400 million. San Diego appears to be similar to the nationwide trend: VC investment for the US was higher from last quarter, but still much lower than the peaks seen in 2015.

We spoke with Huggett about the reasons for the apparent disparity in the numbers and what the future looks like for VC investment in San Diego.

GlobeSt.com: What are the factors that come into play with the increased numbers in Q1 and decreased numbers year-over-year?

Huggett: Companies are having more success raising capital in San Diego, but still struggling to raise capital for research, operations, platform investment and platform expansion as they did a year ago and in years prior (Q4 2015). This is also a result of companies struggling to keep valuations up since they are unable to raise necessary capital as in the past. As they go through funding rounds and struggle to raise, this causes further issues when going out to other funding sources, which could further be a cause of the increase in Q1 2017 numbers but a decrease in year-over-year.

GlobeSt.com: What does the future look like for VC investment here?

Huggett: Opportunistic investing seems to be the future of VC investment in San Diego. We are seeing quality companies that are focused on large market opportunities and specific strategic opportunities.

GlobeSt.com: What types of companies are VC investors most interested in in the San Diego market, and are these companies on the rise or fall here?

Huggett: VCs are looking to bet on companies pursuing high-impact research and solutions to large-scale problems such as oncology-related issues, which are on the rise in the region. VCs are willing to partner and fund with companies looking for breakthrough science in San Diego.

SAN DIEGO—Increases in venture-capital funding in Q1, but decreases year-over-year, show that companies are having more success raising capital in San Diego, but are still struggling to raise capital for certain areas of VC investment, CBRE's first VP Andrew Huggett tells GlobeSt.com.

CBRE recently reported that total VC investment in San Diego firms was $248 million in Q1 2017, up 22% from Q4 2016, but down 52% from Q1 2016, according to data from the PwC/CB Insights MoneyTree Report and Mattermark. Deal volume was 33, which is considerably lower than the quarterly average of 50 deals.
For San Diego, this was a slower quarter compared to very strong investment from 2014 to 2016, when the quarterly average was $400 million. San Diego appears to be similar to the nationwide trend: VC investment for the US was higher from last quarter, but still much lower than the peaks seen in 2015.

We spoke with Huggett about the reasons for the apparent disparity in the numbers and what the future looks like for VC investment in San Diego.

GlobeSt.com: What are the factors that come into play with the increased numbers in Q1 and decreased numbers year-over-year?

Huggett: Companies are having more success raising capital in San Diego, but still struggling to raise capital for research, operations, platform investment and platform expansion as they did a year ago and in years prior (Q4 2015). This is also a result of companies struggling to keep valuations up since they are unable to raise necessary capital as in the past. As they go through funding rounds and struggle to raise, this causes further issues when going out to other funding sources, which could further be a cause of the increase in Q1 2017 numbers but a decrease in year-over-year.

GlobeSt.com: What does the future look like for VC investment here?

Huggett: Opportunistic investing seems to be the future of VC investment in San Diego. We are seeing quality companies that are focused on large market opportunities and specific strategic opportunities.

GlobeSt.com: What types of companies are VC investors most interested in in the San Diego market, and are these companies on the rise or fall here?

Huggett: VCs are looking to bet on companies pursuing high-impact research and solutions to large-scale problems such as oncology-related issues, which are on the rise in the region. VCs are willing to partner and fund with companies looking for breakthrough science in San Diego.