OCRI's Jeff Dale

Ottawa enjoyed its best third quarter for venture capital activity since 2001, according to a report Friday from OCRI, with local firms raking in $89 million.

The Ottawa Centre for Research and Innovation reported that the total in the latest July-to-September period was up by 33 per cent from the $67 million reported in the third quarter of 2003, making for a year to date total of $170 million.

For the second quarter, OCRI counted up 12 deals totalling $62.4 million.

"This continued upturn in investment activity is encouraging," OCRI president Jeffrey Dale said in a statement. "This is the second consecutive quarter of year over year increases in investment activity and, hopefully, indicates that sustained growth in investment activity is underway."

OCRI said photonics and life sciences firms accounted for 75 per cent of the venture capital disclosed during the quarter, while software and wireless firms also received attention.

The star of the quarter was Tropic Networks, which secured a fourth-round worth $44 million in July, the largest single VC win in Ottawa in 18 months.

"Tropic Networks stands as a great example of the kind of innovative companies building world class businesses headquartered right here in Ottawa," added Tropic CEO Kevin Rankin. "Investors all over North America recognize the vast opportunity that exists here and continue to enthusiastically back the Ottawa business community."

OCRI also pointed out that half of the deals disclosed during the third quarter involved U.S. investment.

"Ottawa continues to develop a significant profile in international investment markets," Mr. Dale said. "U.S.-based venture professionals are still expressing confidence in local technology companies and are staying on top of the world-class opportunities in the region."

Other notable deals during the quarter include Natural Convergence with

$12 million, Zelos Therapeutics Inc. with $7 million and Spotwave Wireless Inc. with $7 million. Massachusetts-based Taral Networks, which has a local R&D operation with 22 staff, also won $13.06 million during the quarter.