Tech Coast Angels Invest More Than $9.7 Million in 31 Companies in 1H 2020
Southern California-based angel network reports second-highest investment funding in its history
IRVINE, Calif. – August 4, 2020 – Tech Coast Angels (TCA) today announced that it invested $9.7 million into 21 new companies and 10 existing companies from the period of January to June 2020. Despite the global pandemic and economic crisis, TCA members continue to invest at a near-record pace—30% short of 2019’s record, yet still 33% higher than 1H 2018 and greater than every other year since TCA’s inception in 1997. This pace is higher than during previous economic cycles, which normally elicit a steeper decline at this point.
Life sciences represented nearly half (48%) of TCA investments for the first half of 2020, with hardware, software, cleantech/industrials, consumer internet, and consumer products making up the remainder. The average investment per company was $312,000. This compares to $360,000 in all of 2019 and $203,000 in all of 2018.
Valuations have started to decline, and are expected to be lower going forward, according to a survey of TCA members: 2020 median valuation has dropped 6% from 2019, and 78% of TCA members expect valuations to diminish in the near future. Only 4% expect valuations to rise, and 17% stay the same; 39% expect 10-20% drop, 29% expect 20-30% drop and 11% expect more than a 30% drop. Entrepreneurs should be realistic about valuation in order to secure adequate funding to get through this economic crisis.
The current economic climate has caused some reluctance from nearly a quarter of TCA members who invested in 2019. So far in 2020, only 76% of TCA members who invested in 2019 have invested in the first half of 2020, and these 24% of members on the “sidelines” is contributing to lower direct member investment in 2020. However, individual chapter funds had a positive impact to 1H 2020’s investment amount: San Diego, Orange County, and Los Angeles network’s annual funds, and TCA’s ACE Fund, totaled $3.5 million, representing 36% of the 1H amount—up from 15% in 2019.. The growing role of these funds demonstrates the importance of bringing capital to bear quickly to shorten the funding cycle. Twenty-two (22) of the 31 companies received fund investment in addition to direct member investment.
“While our members are still seeking new and follow-on investments, a survey we just completed says that interest is trending slightly towards new investments,” said Sergio Gurrieri, chairman of TCA. “Early-stage companies applying for funding must be realistic about valuation going forward, in order to secure funding and survive these economic and health concerns.”
New companies added to TCA’s Portfolio in 1H 2020:
- Abintus Bio: in vivo CART products that directly reprogram immune cells
- AgTools Inc: food supply SaaS platform offering real-time intelligence
- Aligned Carbon: Manufacturable carbon nanotubes for integrated circuit foundries
- Blackdot: world's first automatic tattoo machine
- Blue Social: first Bluetooth Market Network
- BlueNalu: pioneering the category of sustainable cell-based seafood
- Eyedaptic: development of visually assistive Augmented Reality solutions
- Fitplan: interactive fitness training app with workouts of top fitness influencers and athletes
- Gali Health: breakthrough approach to treat severe inflammatory and autoimmune conditions
- Hawthorne Effect: makes follow-up visits more accessible for patients
- iDentical: leveraging 3D technology for drill-free dental implant
- Insight Medical: computer assisted surgery in orthopedic procedures
- Labviva: AI driven purchasing platform for scientific products in life science market
- Maxwell Biomedical: Defibrillation for restoration of sinus rhythm in patients with arrhythmia
- Noria Water Technologies: membrane monitor for operational efficiency of water treatment plants
- PetDx: non-invasive “liquid biopsy” tests for cancer in pets
- Razberi Technologies: cybersecure video surveillance and IoT systems on the "edge'
- Recess: live events online marketplace
- Strategikon Pharma: SAAS for end- to- end management of “clinical business operations”
- Terecircuits: novel circuit fabrication and assembly technique
- Upcycle and Company: Fertilizer engineered with upcycled waste materials
Existing TCA Portfolio companies receiving follow-on funds in 1H 2020:
- Advekit: marketplace that matches patients with mental health professionals
- GroupSolver: intelligent survey software combines machine learning & crowd intelligence
- Habitu8: understand, benchmark, and shape risky employee behaviors
- Neural Analytics: non-invasively measure intracranial pressure
- Nevados: solar ground installations that are faster to install and less expensive
- Ready, Set, Food!: protect babies from developing peanut, egg and milk allergies
- Somabar: hands-free bartending appliance for the home kitchen
- Turn Technologies: solutions for the 1099 labor supply side of the gig economy
- Whistle: allows hotels to communicate with guests through Mobile Messaging and SMS
- YouMail: voice messaging for cell phones
“TCA continues to be a vital source of capital for the entrepreneurial ecosystem, even in this time of uncertainty,” concluded Mr. Gurrieri. “In fact, most of the Fund investment was committed within 30 days of screening, helping solidify TCA as the best place for the best companies to raise their seed capital. Our members are honored to continue sharing their experience and capital to support, mentor, and invest in excellent early-stage companies that will provide a strong foundation for a strong future economy.”
About Tech Coast Angels:
Tech Coast Angels (TCA) is one of the largest and most active angel investor networks in the nation, and a leading source of funding for seed-stage and early-stage companies. The angel network is comprised of five chapters, consisting of over 450 members in Southern California. Every TCA member is an accredited investor, and companies in which TCA invest go through well-structured, transparent, time-efficient screening and due diligence. TCA members are founders and business leaders who have extensive knowledge in the investment process and world-class business practices, and thus are able to provide companies with more than just capital: they also contribute counsel, mentoring and access to an extensive network of investors, customers, strategic partners and management.
Since its founding in 1997, TCA has invested over $240 million in more than 435 companies and has helped attract more than $1.6 billion in additional capital/follow-on rounds. http://www.techcoastangels.com.
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