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Summary:

We’re at an odd time in the technology industry. While there’s bound to be some pre-holiday layoffs around the corner, it shouldn’t be like the carnage of last winter. The market wreck isn’t over, yet new venture deals have been coming across our desk in droves.

We’re at an odd time in the technology industry. While there’s bound to be some pre-holiday layoffs waiting around the corner, it shouldn’t be like the rapid-fire carnage of last winter. Meanwhile, venture-backed companies like Fortinet are finally making it all the way to IPO and beyond. And acquirers are willing to go the distance, like Google for AdMob.

But the damage from the market wreck isn’t over; Marty Pichinson of Sherwood Partners, a Silicon Valley firm that helps shut down startups, expects to close 150 to 200 companies next year, the Wall Street Journal today quotes him as saying. That would be majorly up from 55 companies so far in 2009, and 99 companies in the nuclear winter of 2001.

Yet new venture deals have been coming across our desk this week in droves. Take the last couple days’ bounty, with help from peHUB:

  • Aquantia added yet more funding for its 10-Gigabit Ethernet chips, a Series D round of $35 million now and up to $44 million from New Enterprise Associates, Lightspeed Venture Partners, Greylock Partners, Pinnacle Ventures and Venture Tech Alliance.
  • The profitable Groupon raised a $30 million B round for collective deal bargaining in a round led by Accel Partners.
  • With that magic number in mind, Zoosk also raised $30 million, a Series D round for its social dating site from Bessemer Venture Partners, Cannan Partners and ATA Ventures.
  • Xirrus added $20 million for enterprise Wi-Fi in a round led by InterWest Partners. (See our WebWorkerDaily write-up.)
  • Complex Media raised $12.8 million for its network of young male-oriented sites and magazine.
  • Mobile application platform HipLogic, which told us this week that Android and social networking will be two of its focuses next year, raised $7 million from Benchmark Capital, Stage 1 Ventures, Bay Partners and Accrue Sports and Entertainment Ventures.
  • Financial news sources Seeking Alpha and StockTwits both announced new rounds; $7 million Series B from DAG Ventures, Benchmark Capital and Accel Partners and $3 million from Foundry Group and True Ventures. (True Ventures is a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.)
  • Vizu raised $6.75 million for brand advertising analytics (way back in the day it started out doing online polls) from iNovia Captial, Greycroft Partners, Draper Fisher Jurvetson and Esther Dyson.
  • Meanwhile, in a similar naming vein, B2B ad company Bizo raised $6 million from Bessemer Venture Partners, Vulcan Capital and Ascent Equity.
  • Mobile ad startup Smaato raised $4.5 million in Series B financing from Aeris CAPITAL and others.
  • Other deals that have come out in the last couple days include Square and gWallet, which we’ve already covered, plus $9 million for TelaDoc, $5.8 million for OwnerIQ, $5 million from Branders.com, $4 million to DriveCam and $1 million for Ansca Mobile.

This is coming off a third quarter that had 2009 on track to have the lowest amount of U.S. venture investments since 2003, with $5.1 billion in 616 deals, according to Dow Jones VentureSource, and 41 percent up rounds, 36 percent down rounds, and 23 percent flat, according to Fenwick & West.

Having lived most of my life in Silicon Valley, I can’t help but be optimistic about this latest spate of funded companies’ prospects. But at the same time, Pichinson plans to soon wind down the last few years’ batch of hopefuls. At this point in the cycle, one person’s upswing is another’s bleak prospects, and vice versa.

Image from Flickr user Jason McHuff.

  1. That’s not to mention all of the “zombie” startups out there that won’t be closed down but will not be hiring or otherwise contributing much to the economy and will be hanging on hoping for a breakeven exit.

    Come to think of it, that also describes a significant number of venture capital firms…

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  2. Hi Liz,
    We’re seeing the same very high level of activity this quarter. Lots of new investment across the stage spectrum.
    Jon

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