After an uncharacteristically down fourth quarter, Maryland venture funding totals dipped in 2019 - Technical.ly Baltimore

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Jan. 24, 2020 7:03 am

After an uncharacteristically down fourth quarter, Maryland venture funding totals dipped in 2019

Still, data from a PwC/CB Insights MoneyTree report shows growth over a decade.
Money.

Money.

(Technical.ly file image; source unknown)

Correction: An initial version of this story said Maryland companies raised $614M. It was actually $607M. (1/24/2020, 5:25 p.m.)

Maryland companies raised a total of $607 million in 72 venture capital deals in 2019 — a total that was down 46% from 2018’s record-setting funding figures that topped $1 billion, according to a recent PwC/CB Insights MoneyTree report.

The down total for the year came as funding in the fourth quarter fell. In recent years, the funding totals have ended the year on a high note. But this year, funding for the fourth was down when compared to the third quarter.

“Part of the reason for the drop was that $[117] million was invested into Maryland companies in Q4 of 2019, compared to $192 million in Q3,” said Brad Phillips, director of emerging company services for PricewaterhouseCoopers.

The most recent quarterly total was also down significantly from Q4 of 2018, when Maryland companies received $226 million in venture funding. Phillips said the size of the drop was “quite unique.” In fact, each quarterly total for 2019 was lower than its 2018 counterpart.

It came in a year that didn’t have the big numbers of a “megadeal” over $100 million that boosts totals. However, there was a silver lining for smaller-dollar deals to get companies growing, as funding for seed-stage deals increased 27% year over year to $47 million in the state.

The data for 2019 continued to reflect a trend of quarterly and annual totals being “choppy” in the entire D.C.-Maryland-Virginia region.

“If you look at the annual dollars invested in the last few years, since 2014 the number of dollars has fluctuated by at least $325 million either up or down each year,” Phillips said.

So while quarter-to-quarter and year-to-year comparisons can offer a temperature check on how much funding is entering the region, a longer-term lens may be necessary to get a handle on overall health. The end of the decade provides a handy measure on that front, and it shows an upward trend by one key measure.

In the D.C.-Maryland-Virginia region, the average annual investment from 2010 to 2015 was $1.25 billion. For the second half of the decade, it climbed to $1.76 billion, Phillips said. That half-billion-dollar jump shows the overall trajectory is trending toward more dollars coming in.

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“That’s more important than what happened last quarter or last year, given the history of this region being choppy and that we don’t get a lot of big deals,” Phillips said. “Most regions would take that trend in a minute.”

In the region, Maryland companies accounted for 44% of the venture funding in 2019.

In the state, Gaithersburg proved to be the top deal-getter, with $259 million raised over three deals. That reflected the Montgomery County area’s biotech base, with an $85 million Series B round for cancer therapy company Arcellx and a $75 million Series B round for Viela Bio ahead of the MedImmune spinout’s $900 million IPO. A $50 million Series B for manufacturing platform Xometry added an on-demand company to the mix.

Baltimore companies raised a total of $89 million on the year, with a $16 million Series C closed in August by Fells Point healthcare analytics company Protenus standing out.

The city was also a chief beneficiary of some sizable deals noted across the country last year, as cancer blood test company Thrive Earlier Detection Corp. raised $110 million and application security company Contrast Security raised $65 million in 2019. Both companies are based in other cities, but were founded here and maintain sizable engineering and development employment bases.

For the fourth quarter, the top dollar deal in the state was a $55 million Series C for College Park-based quantum computing company IonQ.

In Baltimore over the fourth quarter, we noted that Canton-based medical device company Sonavex raised $1.8 million, Remington-based charitable giving company Pinkaloo raised $1.25 million and Pigtown-based digital stethoscope company Sonavi Labs raised $1 million.

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