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Source: CB Insights

There’s been an awful lot of talk of bubblemania in the tech industry in recent weeks. But that frenzy isn’t hitting the Seattle venture capital and startup ranks. At least that’s one read of the the second quarter venture capital activity report from CB Insights, which showed that venture capital investing actually slumped in the state during the second quarter.

Venture capitalists pumped $132 million into 29 deals during the quarter, down from $211 million invested in 25 deals for the same period last year. That’s a 37 percent drop.

What tech bubble?

Investments are surging in NYC's tech community

Contrast that with New York which saw investment totals surge to $539 million during the second quarter, up from $355 million. The growth in Massachusetts was even more impressive, with investment levels climbing from $689 million to $1.1 billion during the period. Texas and California also saw upticks in investment dollars, though more modest gains when compared to New York and Massachusetts.

In fact, Washington state was the only state of the five major regions which saw a decline in investments.

No wonder that the authors of the CB Insights report used the tagline “sleeping in Seattle” to describe the current environment here.

Is it really that bad?

Well, it is somewhat surprising that the venture capital totals in Massachusetts would register ten times that of Washington state.  Even worse, Washington state now accounts for just two percent of all venture capital dollars allocated in the U.S., down from four percent during the first half of last year.

There has been some good news as of late in the Seattle tech industry, with Impinj and Zillow recently filing for IPOs. And the folks over at PopCap Games are pretty happy after Electronic Arts agreed this week to gobble up the company for up to $1.3 billion.

But we’ve also noted a trend of Seattle area venture capital firms spending more of their time on deals outside of the state. If that continues, you can expect the amount of funding to continue to dry up in Seattle. And that means it will be harder to create the next Zynga, LinkedIn or Groupon in Seattle.

Here’s a look at some other interesting charts from the report, including national totals, which also increased during the second quarter.

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