With the books closed on the last few venture capital deals of 2018, we have more definitive insights into how Heartland startups fared with fundraising last year compared to years prior.
According to a report issued by PitchBook and the National Venture Capital Association, U.S. startups raised $130 billion last year. As has been the case for the past several years, the bulk of that increase in funding was driven by California-based startups, which raised nearly $77.3 billion in 2018, compared to $41.3 billion in 2017.
But bright spots appeared in several Heartland states. According to PitchBook, Ohio startups raised more than $1 billion last year — the most raised since 2006, and possibly ever. North Carolina startups raised an impressive $2.6 billion, capping off the year with Epic Games, the Cary-based creator of Fortnite, raising $1.25 billion. And in Indiana the number of venture-backed startups continues to grow at a healthy clip, with 93 startups in the state raising venture capital in 2018, compared to just 14 startups in 2017.
PitchBook’s findings should be taken with a grain of salt because of the unorthodox way some startups report their fundraising. For example, PitchBook lists Ohio’s BioMotiv as having raised $146 million this year. BioMotiv did file a form D in August noting that it has raised $146 million — since 2012. So, it’s unclear how much of that funding came this year. PitchBook also lists Indiana’s Scale Computing as having raised nearly $35 million, though the company’s SEC filing indicates that it had closed just $21 million of that round as of October.
Even with some of these asterisks, we do know that more startups in many of these states reached significant funding milestones than they did in previous years. Ohio’s Root Insurance crossed the unicorn mark after having raised $151 million last year. North Carolina’s Pendo raised $50 million, putting its total funds raised at $106 million, which appears to be the largest VC haul for a North Carolina startup in nearly two decades. And Utah’s Divvy raised more than $45 million in two funding rounds in 2018 — a nearly unprecedented accomplishment for a startup that’s just a year old and is based outside of the Valley. I’m looking forward to digging further into 2018 funding numbers over the coming weeks.
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Heartland Tech Reporter
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