May 2, 2007

  

A Publication of the Economic Development Corporation of Utah
CEO Jeff Edwards

PRESIDENT'S

MESSAGE

Utah VC Investments Lower, but Still Healthy


Although first quarter investments were below last year numbers, venture capital investments in Utah continue their strong activity overall. One indicator of the health of this sector is that there is more venture capital under management in Utah than ever before. With the strength of groups like Vspring, and the addition of the Utah Fund of Funds, that trend should continue.

Today’s feature article focuses on Utah venture capital. It showcases PricewaterhouseCoopers’ most recent MoneyTree Survey and an interview with PWC Manager Joe Strain.

This edition of the Economic Review includes links to many of the ED-related news stories from the past week. As always, if you have comments, suggestions or topics you’d like to see in the Economic Review, please contact us by clicking the “Comments” link on the bottom of this page.

Enjoy!

Jeff Edwards
Jeff Edwards
President and CEO

FEATURE

MoneyTree Survey Says...


Utah VC Investment Still Healthy, But Hovering at Lower End of Range

While the $25 million venture capital investment in Utah companies during the first quarter 2007 is down significantly from the $61 million received in the first quarter of 2006, it’s still in a healthy range, according to Joe Strain, a manager with PricewaterhouseCoopers.

Utah’s venture capital investment is outlined quarterly in PricewaterhouseCoopers' MoneyTree Survey, which was released early last week.

Strain says Utah’s venture capital investment is currently hovering around the $30 million mark per quarter, which is at the low end but still in a healthy range. "That's around $100 million a year in venture capital investment. Anything from $20 million to $60 million in one quarter represents a good level of investment,” he says.

Six Utah companies received funding during the first quarter in a broad range of investments, which included companies in energy, medical devices, technology, software, and Internet communications. "That’s pretty exciting," Strain says. "It's a good indicator of Utah's broadening entrepreneurial base. In the past, standard venture capital investments in Utah companies have focused on software and Internet communications companies."

The Utah deals:

Company

Product

Deal Size

Control 4

Internet Communications products

$10,999,900

Wasatch Wind, Inc.

Energy

$3,600,000

Infopia, Inc.

Software/Internet

$1,000,000

Lingotek, Inc.

Software/Internet

$1,999,000

TechniScan Medical Systems, Inc.

Medical devices

$6,400,000

Zonder, Inc.

Technology

$1,200,000


"Hopefully, we'll see some of these investments turn into bigger transactions later on," Strain says. "We are pretty optimistic that we’ll move to the upper end of the range."

Utah’s most aggressive venture capital group during the first quarter was Vspring, which closed five deals, two of which were with Utah companies: Control 4 and Zonder, Inc. The Canopy Group, another Utah venture capital group, closed one Utah deal, investing $1 million in Lingotek, Inc.

Nationally, venture capital investment in the first quarter totaled $7.1 billion—the best quarter in venture capital history. What’s interesting about that, Strain says, is that almost half of that investment total went to companies in California. "It’s almost unbelievable," he says.
Utah's share of total U.S. venture capital investment in the first quarter was 0.35 percent, down from 0.65 percent for all of 2006. The state's average deal size in the first quarter was $4.2 million, while the U.S. average was $9.1 million.

Venture Capital Shifts to Energy
Wasatch Wind Featured by Deseret Morning News

High-tech and Internet businesses typically capture the majority of Utah's venture capital funds, but a Heber City-based company intent on building a wind farm in the state secured $3.6 million in venture capital money in this year's first quarter, according to the MoneyTree survey. (Read the Morning News story here.)

Utah Fund of Funds Featured
in Three-Part Series
Jeremy Nielsen and Kimball Thompson have published a series of short articles describing the vision and purpose, structure, direction and progress of the Utah Fund of Funds, one of Utah's most significant ongoing economic development programs.

The first installment provides an overview of the UtahFoF, while the second describes the program’s structure and financing. The third installment describes the program's current portfolio of venture/private equity funds. The entire series can be accessed on the UtahFoF website under “In the News,” or click here to read the first article.
HP to Buy Arteis
Lindon-based Arteis, a leading web-based graphic design service provider and past recipient of venture capital investment, is being acquired by Hewlett-Packard Company, according to details announced last week.

Arteis owns LogoMaker and Logoworks, online do-it-yourself design applications. Financial terms of the transaction were not disclosed. (Read more here.)

Former Dugway Proving Ground Commander Named GOED Director

Gary Harter, who has been with GOED for the past two years as the Director of Defense and Homeland Security Program, was recently appointed as the new managing director of the department’s Create Pillar, which is responsible for the Cluster’s Initiative to support targeted industries in the state.
 

'Touched By An Angel' and 'Everwood' Veteran Takes Helm of Utah Film Commission

It was the devil himself in the form of a character in Stephen King*s mini-series “The Stand” that brought Utah's newest Director of the Utah Film Commission, Marshall D. Moore, to the state 14-years ago as a Location Manager.

This week Moore was named director of the Utah Film Commission by Jason P. Perry, executive director of the Governor*s Office of Economic Development. 2007 has been a year in which Utah is seeing more feature-length films and commercials being made here than at any other time in history. (Read more here and here.)

EDCUTAH PARTNERS


Current Partners
Why Be a Partner?
Board of Trustees

IN THE NEWS

Economic Development Headlines

Challenges Overcome, Work Begins on $22M Village on Main Street

- Construction of the $22.3 million Village on Main Street office, residential and retail complex has begun in Bountiful. (SL Enterprise)

Five-Star Resort to be Built on Former Park City Superfund Site

- Ground is scheduled to be broken this summer for The Montage, a new luxury hotel and resort adjacent to Deer Valley Resort in the Empire Pass community of Park City, slated for completion in summer 2010. (SL Enterprise)

Water Purifying Equipment Firm to Expand Manufacturing by 40 Percent

- Water & Power Technologies, a Salt Lake City firm that provides equipment and services to clients that require ultra-pure water, has leased 104,500 square feet in a single structure at 1455 S. 5500 W. that will increase the firm's manufacturing and assembly space by 40 percent.
(SL Enterprise)

Denver-Based Chain of Mexican Restaurants Enters Utah Market

- Chipotle Mexican Grill has entered the Utah market with a location in West Bountiful and two additional sites set to open this summer in the Salt Lake Valley. (SL Enterprise)

Mr. Mac to Permanently Leave Mall in Favor of Freestanding Location

- Mr. Mac Downtown is planning to permanently relocate from the ZCMI Center to the former Arent's Building.
(SL Enterprise)

Retail Plans Announced for Main St. ‘Bucket Lot’

- The fabled portion of Logan property at 975 N. Main will soon be home to a commercial development that includes a 24-hour Walgreen’s pharmacy and renovated Carpet Barn store. (Herald Journal) 

Kane County Starts Earthfest

-  From May 21-26, the Kane County Office of Tourism will stage the Amazing Earthfest in Kanab to celebrate the "magnificent landscapes, diverse ecology and cultural heritage . . . of the Colorado Plateau." (SL Tribune)

Economic Group is Providing its Services to Utah County

- The Economic Development Corp. of Utah said it has signed an agreement with Utah County to provide economic development and business recruiting services to the county. (Morning News)

Utah Economic Group Gets New County Officer

- The Economic Development Corporation of Utah, or EDCUTAH, appointed a new full-time business development manager for Utah County. Russ Fotheringham was named EDCUTAH's Utah County public development manager on Monday.  (Daily Herald)

Wal-Mart Seeks Parleys Way Site Zoning

- Wal-Mart Stores Inc. says it will have a store on Parleys Way. What kind of store remains to be seen. (Morning News)

Provo's Economic Redevelopment District May be Renewed

- The Provo city economic redevelopment district is approaching its three-year sunset in March, but the Municipal Council plans to renew it. The city has announced plans to continue the 0.14 percent property tax on local businesses as part of the downtown economic redevelopment district.  (Daily Herald)  

Wal-Mart Site Plan Advances

- The Cedar Hills Planning Commission has recommended the City Council approve a final site plan for a 132,000-square-foot Wal-Mart and adjacent strip stores in the northern Utah County community. (SL Tribune)

Venture Capital Down in Utah

- Venture capital investment in Utah in the first quarter totaled only $25 million, down significantly from $61 million in the first quarter of 2006. (SL Tribune)

Old Mac’s Site to be Developed

- During Tuesday’s Bountiful City Council meeting, the council held a public hearing regarding what is to come of the Mac’s site, which sits on 2135 South Orchard Drive.
(Clipper Today)

New Retail Center for Mapleton Proposed

- By this time next year, Mapleton residents may be able to do more of their shopping closer to home. (Daily Herald)

Mixed-Use Project Covets Gravel Pit

- Unsightly gravel pit land here east of Highway 89 could be transformed into an upscale mixed-use hillside community if a Salt Lake City development team gets its way. (SL Tribune) (Clipper Today)

Utah Pitches Sciences to Canada

- Utah's life sciences businesses began to build a bridge this week to the third-largest biotechnology center in North America.  Utah Gov. Jon Huntsman Jr. said Tuesday that a trade mission he was leading to Canada was designed to help Utah's "rich and fertile" life sciences sector connect with the same sector in Toronto. (Morning News)

Dixie Tops National List for Growth

- Utah's Dixie hit another economic milestone this month when Inc. magazine hailed St. George as the nation's top "boomtown" for 2007. (Morning News) (KCPW)

Local Law Firms Seeing Increase in Business, Executives Say

- Utah’s law firms are reaping the windfall created by the booming economy, reflecting the demand not only in private sectors such as real estate and finance but also in public services. (Utah Business Magazine)

Mobi-Light Honored as SBA 2007 Small Business Exporter

- Ross Johnson of Mobi-Light in West Jordan was among the nine small business owners and leaders of small business support organizations recognized Tuesday by the U.S. Small Business Administration for their outstanding support of entrepreneurs. (Utah Business Magazine)