Venture capital investment in Michigan companies during the third quarter reached its highest level in 12 years

Posted on October 19, 2012

Venture capital investment in Michigan companies during the third quarter reached its highest level in 12 years, according to data released today.

Almost all of the $112 million went to two companies. Troy-based Protean Electric, which plans to manufacture an in-wheel electric drive system for hybrid, plug-in hybrid and battery electric vehicles, received $73 million from three venture capital firms and the city of Liyang, China.

Allen Park-based EcoMotors International, which has developed a more fuel-efficient diesel engine for vehicles, obtained $32.5 million from Braemar Energy Ventures, Bill Gates and Khosla Ventures. Twelve other Michigan companies obtained a total of $7 million.

Altogether, the $112 million invested in the third quarter was the highest since $143 million went to 17 Michigan companies in the first quarter of 2000, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association.

So far this year, $186 million in venture capital has been invested in 35 Michigan companies. That’s more than double the weak levels seen last year, when just $85 million went to 36 companies.

The increase in venture investment in Michigan comes amid a decline in venture activity nationwide.

Through the first three quarters of this year, total venture capital investment in U.S. companies fell 9.5% to $20 billion from $22.1 billion in the year-ago period. The total number of deals dropped 10%.

“We’re seeing fewer new venture funds being raised, which means less capital is available for new investments,” Tracy Lefteroff, global managing partner of PricewaterhouseCoopers’ venture capital practice, said in a statement.

Katherine Young, Detroit Free Press.