Investors have funneled more than $123 million into Michigan startup companies so far this year, a 35 percent increase compared to the same time period in 2009, according to a report released today by the Michigan Venture Capital Association (MVCA).

The report notes that dollar totals are up even though deal numbers are down: There have been 10 VC investments made in Michigan companies to date in 2010, compared with 12 investments between January and August of 2009, which were worth a total of $91 million.

The largest contributor to the higher VC numbers this year was a $51.7 million investment in Cerenis Therapeutics, a biopharmaceutical company based in Ann Arbor, MI, and Toulouse, France. Half of that late-July investment came from the Fund for Strategic Investment in France and the other half from a number of U.S. VC firms, including Ann Arbor’s EDF Ventures. It was one of the largest VC investments in Michigan this past decade, and Cerenis CEO Jean-Louis Dasseux told me at the time that it was just a first close and to expect a second later this year.

The second-largest investment in a Michigan was from out-of-state venture capitalists. Khosla Ventures, of Menlo Park, CA and Microsoft Chairman Bill Gates invested $23.5 million into Troy, MI-based EcoMotors International, which develops highly efficient gas and diesel engines.

“This report conveys the progress the venture and entrepreneurial community has made in Michigan,” MVCA Executive Director LeAnn Auer says in a prepared statement released this morning. “Our year-to-date numbers are substantially higher than last year, proving there are both exceptional companies to fund in our state as well as a growing VC community here to support them.”

This report could lighten the mood a bit, compared to a Michigan VC meetup in Ypsilanti, MI, back in May, when the state’s low investment numbers were, employing some mental gymnastics, spun as a good thing because Michigan knows how to do with less.

As of today, there’s slightly more to work with.

Trending on Xconomy