Venture capital firms with operations in Orange County decreased their local investments last year by about 12%, the third straight year of declines.
The largest 13 firms here had 25 area investments totaling $50 million in 2023, down from $56.9 million in 2022 and $71.5 million in 2021, according to the Business Journal’s latest directory of venture capital firms.
Newport Beach’s Toba Capital, the largest venture capital firm in Orange County with $1.5 billion in funds under management, reported five local investments totaling $6.5 million.
For the second year in a row, the largest local investment came from Cambridge Companies SGP, which has a Newport Beach office and made two investments in OC businesses totaling $22 million.
The firm, co-founded by siblings Filipp Chebotarev and Polina Chebotareva in 2010, invests in real estate and various consumer packaged goods concepts, from health food company Tosi Foods of Anaheim to vegan frozen treat brand Modern Pop of Laguna Beach.
Last year was “the largest year on record” for Cambridge, according to Filipp Chebotarev.
“Our goal for 2024 is to continue to find mindful investments that promote health, wellness and sustainability while achieving above average returns for our group,” he told the Business Journal.
Roller-Coaster Year
Costa Mesa-based CerraCap Ventures made three OC investments totaling $2.5 million.
Partner Nikki Arora described 2023 as a “roller coaster” for venture capital firms, citing fundraising struggles, a lack of activity in the exit market and the collapse of Silicon Valley Bank as main factors.
“Despite all that chaos, the activity levels for seed through Series A investments remained pretty steady,” Arora told the Business Journal.
Last July, CerraCap successfully exited its portfolio company Sunnyvale-based Somnoware Healthcare Systems Inc. as it was being acquired by ResMed.
CerraCap last month also invested in Swedish medical device company Acorai for an undisclosed amount, to further the development of Acorai’s heart monitor device.
CerraCap is currently raising its third $100 million investment fund and recently expanded into New Mexico with its first office in Albuquerque.
Growing Local Investments
Okapi Venture Capital of Newport Beach nearly doubled its local investments to $4.7 million in 2023 from $2.4 million in 2022.
The firm, founded in 2005, invests in startup software companies involved in cybersecurity, fintech and artificial intelligence.
Marc Averitt, Okapi’s co-founder and managing director, previously worked as an attorney for Silicon Valley-based Sun Microsystems, which was acquired by Oracle in 2009, and Santa Clara chipmaker giant Intel Corp. (Nasdaq: INTC).
“We saw an increase in value for a number of our portfolio companies that have matured, as well as lower entry pricing for a number of new investments in 2023 due to the decline in venture capital overall,” Averitt told the Business Journal.
Adventus Ventures of Irvine also upped its local investment to $7.5 million in 2023 from $6 million in 2022.
Established in 2017 by entrepreneur and Tech Coast Angels Venture Group member Shawn Moaddeb, Adventus Ventures is a medical device incubator and seed-stage investor.
Adventus’ portfolio includes medical device makers Allevion Therapeutics, Pressao Medical and Vascular Health Inc., all of which are based in Irvine.
Moaddeb said Adventus is looking to invest up to $10 million for 2024 to go toward supporting these startups with additional funding for clinical trials and regulatory approvals.
