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Sunday, 02 August 2015 22:00

3 West Michigan firms among 18 statewide that received VC funding in second quarter

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A $3 million follow-on venture capital investment provides growth funding for a Kalamazoo company that offers high-speed telecommunications services to businesses across the state.

Lynx Network Group Inc. will use the investment from Plymouth Ventures to finance further infrastructure development and network expansion, said co-founder Chris Barber.

Plymouth Ventures invested in Lynx Network Group in previous capital rounds in the last four years, said Barber, who formed the company in 2003 with partners Gregg Rutgers and Gerald Philipp. Much of the expansion planned with the latest round of capital will go to connect the company’s fiber-optic network to communications towers providing wireless service to data centers and business parks, Barber said.

He added that the expansion is driven by projects for existing clients.

“For us to continue to grow, we need access to cost-effective capital,” Barber said. “This is critical for us because it does get us down the road where we’ll have the funding necessary to continue to expand on future opportunities as well.”

Lynx Network Group has been experiencing double-digit revenue growth and presently employs about 20 people, Barber said.

Based at Western Michigan University’s Business Research and Technology Park, Lynx Network Group began developing a high-speed fiber-optic network five years ago, Barber said.  The network today covers more than 2,000 miles, carrying high-speed voice and data services around Michigan, primarily in small and rural markets and connecting them to larger cities such as Grand Rapids.

“We purposely built this network to go where we recognized there was a lack of fiber-optic infrastructure,” Barber said. “There were certain areas in the state that didn’t have the type of capacity service, and we’re bridging the digital divide between the haves and have-nots.”

The investment in Lynx Network Group was one of three deals in West Michigan and 18 statewide listed in the quarterly MoneyTree report from the National Venture Capital Association and PricewaterhouseCoopers.

Other West Michigan companies that received venture capital in the second quarter include software developer Blue Medora LLC, which got $4.6 million in Class A funding led by Ann Arbor-based Michigan eLab Capital Associates LLC. Grand Rapids-based Start Garden LLC and Holland-based Grand Angels also invested in the round.

Benefit Mobile Inc., an Ada-based mobile payment technology firm, secured $970,378 in new equity financing led by Start Garden and other private investors from the West Michigan area.

Overall, 18 Michigan-based companies received venture capital in the April-to-June period for a collective $46.1 million. That compares to 11 deals for $114.8 million in the second quarter of 2014, a period that included one of the largest VC deals ever in Michigan with $59.4 million invested in drug developer ProNAi Therapeutics Inc.

At the time, ProNAi was based in Kalamazoo and Plymouth, but in February, the company moved its headquarters to Vancouver, Canada. ProNAi completed an initial public offering in July that raised $158.4 million from investors.

Midway through 2015, venture investors have put $133.4 million into 30 deals in Michigan, compared to 25 deals for $151.9 million in the first six months of 2014.

Continuing the migration of venture investments toward tech sectors both nationally and in Michigan, 12 of the state’s 18 deals in the second quarter went to firms involved in software, information technology or networking. Three deals were for biotechnology or medical device companies, and the remaining investments were in media and entertainment, financial services, and the industrial and energy sector, according to the MoneyTree report that uses data provided by Thomson Reuters.

Nationally, venture capitalists invested $17.5 billion in 1,189 deals during the second quarter of 2015. That represents an increase of 30 percent in value and 13 percent in the number of deals.

The second quarter was the sixth straight period where more than $10 billion of venture capital was invested in a quarter.

Venture capital investing nationally is on track to exceed $50 billion in 2015.

Read 5190 times Last modified on Sunday, 09 August 2015 09:40

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