After a big 2018, Maryland's venture capital funding totals fall to start 2019 - Technical.ly Baltimore

Business

Apr. 10, 2019 11:10 am

After a big 2018, Maryland’s venture capital funding totals fall to start 2019

Maryland companies raised a total of $79 million in the first quarter of 2019. It was the lowest since the last quarter of 2016, fitting with a trend of "choppiness" in the region.
Let’s talk money.

Let's talk money.

(Photo by Flickr user Pictures of Money, used under a Creative Commons license)

When it comes to local venture capital totals, the highs of 2018 were tempered by a cool start to the year. But that follows a pattern that’s been playing out for a few years.

In the first quarter of 2019, venture capital activity in Maryland totaled $79 million invested in 18 companies, according to data from a recent PwC/CB Insights MoneyTree report.

That was down 65 percent from the fourth quarter of 2018. For the state, it was the lowest funding total since the fourth quarter of 2016.

“It was a significant drop. We would’ve hoped for a stronger quarter, dollars-wise,” said Brad Phillips, a director in PwC’s Emerging Company Services practice. But, he said, it’s important to keep in mind that things have tended to fluctuate over the last five years, depending on when a large deal occurs: “The totals on an annual basis have been relatively volatile.”

For instance, Phillips said, the total in 2016 for the state was $280 million. Then, the next year hit $890 million. And this quarter follows the highs of last year, when Maryland’s VC haul topped $1 billion — its highest point since 2001. The absence of a big deal, like Gaithersburg-based Viela Bio’s $250 million raise in the fourth quarter of 2018, can mark a big difference.

Nationally, investment totals fell by 36% for the first quarter. But the trend of more money being invested in fewer deals continued.

So while the data for a single quarter may not look great, it sticks with the trend of “choppiness.” While it still remains to be seen whether the total for the year will bounce back up, Phillips points out that the second half of the year tends to see more funding, and the overall trend in the last four years still points toward growth.

“It’s not a reflection on whether or not Maryland is a good place to start a company or to invest in companies,” he said.

Funding for companies in the Baltimore metro area made up about 30% of the statewide total. Collectively, there was $40 million invested across seven deals in the area, the report states. This was the lowest funding total for the area since the $33 million posted across 10 deals in Q3 of 2017.

Advertisement

The top area tech deals for the quarter included the $15 million Series A for Fulton-based RackTop Systems, Allovue’s $4 million funding round, Terbium Labs’ $2 million investment from the founder of eBay’s Omidyar Network, as well as funding for BurnAlong and Vixiar Medical. One deal we covered would’ve added, but wasn’t considered in this report: Contrast Security’s $65 million Series D. The company is headquartered in Silicon Valley and so MoneyTree counts it there. Still, the application security company is planning to continue growing a dev office in Fells Point.

Nationally, the report states that investment totals fell by 36% for the first quarter. But the trend of more money being invested in fewer deals continued.

Things played out in a different way locally. The entire D.C. region, of which Maryland and Baltimore are a part for this report’s purposes, saw an uptick in the number of deals when compared with the last quarter, even as the overall dollar total fell. Phillips said it remains important to pay attention to smaller, seed-stage deals, as well.

“It doesn’t pay off for a little while,” he said, “but those are the companies that are then going to need the bigger rounds down the road.”

-30-
CONTRIBUTE TO THE
JOURNALISM FUND

Already a contributor? Sign in here
Connect with companies from the Technical.ly community
New call-to-action

Advertisement

NeoProgen, led by former Harpoon Medical CEO, raises $1.5M from Maryland investors

Summer dip: Maryland companies raised $142M in Q3

Frederick’s Veralox Therapeutics raises $5.4M seed round

SPONSORED

Baltimore

Get to know SmartLogic’s culture of plants, podcasts and productive client relationships

Baltimore

Fastspot

Digital Project Manager

Apply Now

Hunt Valley, MD

LawIQ

SOFTWARE ENGINEER – FULL TIME OPPORTUNITY

Apply Now

North Bethesda, MD

1776

Campus Manager – 1776 @ Greencourt Innovation Center

Apply Now

Maryland VC totals ‘rebound’ with $226M raised in Q2

Cannabis software startup Brytemap raises $1.5M, hires Scott Denholm as COO

Johns Hopkins-founded startup developing blood test to detect cancer raises $110M

SPONSORED

Baltimore

Entrepreneurs, think it’s too early to engage a legal partner? It’s not.

North Bethesda, MD

1776

Campus Director – 1776 @ Greencourt Innovation Center

Apply Now

Philadelphia OR Baltimore

Technically Media

Technical.ly Editorial Intern (Spring 2019)

Apply Now

Annapolis Junction, MD

Asymmetrik

FULL-STACK DEVELOPER

Apply Now

Sign-up for daily news updates from Technical.ly Baltimore

Do NOT follow this link or you will be banned from the site!