Baltimore VC investment starts the year down but not out, following national and regional trends

Like much of the nation, Baltimore venture capital started this year a little slower, with less money spent and fewer companies making deals.

According to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA), companies from Baltimore raised $67 million across 14 deals in Q1.

It follows a busier Q4 of last year, where Baltimore companies raised $159 million over 24 deals. But fourth quarters may not be the best context for predicting trends, Technical.ly reported earlier this year. If you were to look at just 2020’s Q4 of $30 million, for example, you’d miss that the region went on a venture capital high during the pandemic.

Baltimore VC deals have been following a general trend for the last few years where its first and fourth quarters have been weaker, but we see much more deal activity in the middle of the year.

For example, Q1 of 2022 and 2023 saw $76 million and $93 million in deals in the Baltimore-Towson Metropolitan Statistical Area, respectively, while Q2 saw $222 million and $332 million. We’ll be paying attention to whether this trend continues in 2024.

As always, it’s important to note: These figures may vary slightly after publication, as some deals aren’t accounted for until weeks after quarterly VC reports are published, or PitchBook may find errors in its data.

Baltimore’s biggest VC deals in Q1 2024

Top regional deals were in healthcare and information technology industries. Here are the five largest, according to PitchBook data:

1. Impact Analytics, a data and metrics company that aims to improve supply chains, raised $40 million in January.
2. Gliknik, an operator of biopharmaceutical business intended to treat cancer and autoimmune disorders, raised $9.2 million in March.
3. Impruvon Health, a Baltimore-based digital health startup that specializes in automated medication management systems, raised $3 million, according to PitchBook data.
4. NextStep Robotics, a medical device startup developing an AI-driven device designed to assist stroke patients in walking safely, raised $2.3 million, according to PitchBook data.
5. Astek Diagnosis, known for its diagnostic device that aims to identify patients with blood-borne bacterial infections, raised $2 million.

National venture capital trends

Baltimore’s slower Q1 aligns with what much of the rest of the country experienced.

The nation’s total VC deal count was $36.6 billion across 3,925 total deals, relatively on pace with Q1 of last year, if not a little “to the left of the bell curve than usual,” NVCA President Bobby Franklin said in the report’s executive summary. The numbers are nothing to worry about, he continued, saying the VC business cycle has been “effectively reset” in recent years, and is leveling out in 2024.

Kyle Standford, one of Pitchbook’s lead VC analysts, called Q1 a “calm” quarter in the report, saying that not very many outsized deals were closed, but overall deal count still stayed “relatively” high.

Valuations did rise, likely from a stronger performance of the public markets over the last few months, and the idea that already strong companies will be able to continue to raise in a slower market. Stanford did note that some market uncertainties and inflation have pushed the likelihood of lowered interest rates to the second half of 2024, and a recession “remains a possibility.”

While Baltimore may see an uptick in activity in the next two quarters, it may also have a more leveled out year like the rest of the country.

Said Standford: “We don’t expect deal activity to pick up in a meaningful way in the near term.”