Tuesday, May 5, 2015

DS Chemphy, Tagsys RFID among biggest 1st-quarter venture deals

The Wilmington chemical company and King of Prussia electronics firm accounted for nearly half of the $65 million raised by area companies.

DS Chemphy, Tagsys RFID among biggest 1st-quarter venture deals

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At first glance, it seems Philadelphia-area companies raised a respectable $65 million from venture capital firms during the first quarter.

But as I looked at who got the money, I’d almost be tempted to toss out two of the three biggest deals because they aren’t really homegrown.

The data come from the quarterly MoneyTree Report released Friday by PricewaterhouseCoopers L.L.P. and the National Venture Capital Association.

The largest investment locally was $20 million in DS Chemphy Inc., a Wilmington maker of chemicals for the pharmaceutical industry. But the company’s Web site indicates that it’s a holding company for two chemical complexes in China, where it employs about 1,000 people.

Tagsys RFID, of King of Prussia, raised $12 million from five venture firms to help it secure new markets for its radio-frequency identification systems. Tagsys was spun off from smart-card maker Gemplus in a 2001 sale to three private-equity firms, including Saffron Hill Ventures.

Tagsys announced the financing in March, saying it had secured 8 million euros, or about $12 million. Why euros? Because its global headquarters are in the south of France. King of Prussia is the U.S. headquarters.

Subtract $32 million from the $65 million in the MoneyTree Report and you’re left with $33 million spread across 16 companies. In the fourth quarter, 21 area companies raised $84.3 million. So let’s call it a lackluster start for the venture capital sector in 2010.

Still, two deals from the first quarter bear watching.

Philadelphia-based TicketLeap Inc., which operates an online event ticketing service, raised $2.53 million in February for its second round of capital. Its backer is MentorTech Ventures, which invests in early-stage companies, particularly those that started at the University of Pennsylvania.

Radnor-based EnerTech Capital invested $2 million in Tangent Energy Solutions, a Kennett Square firm that is developing sustainable energy strategies.

Tangent was founded by Dean Musser, who’d started Enerwise Global Technologies Inc., another Kennett Square firm that helps companies better manage energy use. Comverge Inc. bought Enerwise for $76 million in 2007.

Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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