Maryland companies raised more than $1B in venture funding in 2018

Maryland’s overall venture capital haul for 2018 totaled crossed the billion-dollar mark for the first time since 2001, according to the PwC/CB Insights MoneyTree report.

The state’s total was $1.12 billion for the year, according to the report. The totals were already on pace to top 2017 figures after the third quarter, and the fourth quarter saw about $218 million invested over 11 deals. In the end, Maryland posted totals 23 percent higher in 2018 over 2017.

The top deals of the fourth quarter included a total of $118 million round for Beltsville-based biopharmaceutical company Nextcure, the $37 million Series B for Hanover-based cybersecurity company Dragos and a $23.15 million round for Bethesda health data company Aledade.

Notable deals from Baltimore city companies for the fourth quarter included the $5 million Series A from manufacturing startup FactoryFour, medical education startup Osmosis’ $2.5 million funding round and medical device startup ReGelTec’s $2 million round.

Brad Phillips, a director in PwC’s emerging company services, called 2018 an “exceptional year” for Maryland. The total represented nearly a threefold increase in the number of dollars invested in 2016, and it improves on previous totals of $982 million (which was helped by a whopping $250 million investment in Tenable) and $909 billion from 2015 and 2017, respectively. While the totals can be “choppy” year-to-year, most instructive for those watching the overall trends is that the average totals of venture funding in the state have been on the rise as a whole since 2013, Phillips said.

“Maryland has had a good couple of years,” he said.

The activity in Maryland mirrored what was happening nationwide. Across the country, venture funding totals in 2018 were at its highest levels since 2000. That coincides with emergence of more “megadeals,” or investments of more than $100 million, and a record number of companies reaching “unicorn” – or $1B valuation – status, according to the report.

Yet, at the same time, the number of deals is declining nationally, meaning fewer companies are getting funded. Specifically, the percentage of seed-stage investment rounds fell for the third straight year to 25 percent, according to the report.

Maryland saw a drop in the number of deals in the fourth quarter of 2018, with 11 recorded after seeing three quarters of more than 20 deals to start the year. Across the state, the total number of deals for the entire year was up in 2018, with 81 compared to 76 in 2017.

“We tend to focus on the dollars a good bit, but the number of deals is a very significant factor, as well,” Phillips said.