Maryland VC investment came back to Earth in 2016

There wasn't a deal over $100 million in the state in 2016, leading to a big drop from 2015's big totals, according to the latest MoneyTree Report. Plus, we've got some Baltimore-specific numbers.

Money. ( file image; source unknown)

When it came to venture capital deals in 2016, Maryland just couldn’t match the highs of 2015.
The latest PwC/CB Insights MoneyTree Report shows that while the final quarter was better than the third quarter’s 20-year lows, cash wasn’t flowing nearly as freely in 2016. Across the state, venture deals totaled $300 million for the year. That’s a 70 percent drop from 2015’s total of just over $1 billion.
Baltimore companies once again held leading spots in the fourth quarter, a $26.5 million raise for Baltimore’s eOriginal and $2 million for Port Covington-based Ready Robotics were both in the top five deals for the state. The total was $38.25 million, a 46 percent increase over last quarter. Undisclosed dollar amounts for deals that funded Terra’s Kitchen and Quantified Care were also highlighted in the report.
Notably, the latest MoneyTree Report also included breakdowns specifically for Baltimore for the first time in this reporter’s tenure. The total of about $93 million for the year was the fifth-best since 2002. There’s work to do to regain the year 2000’s high mark of around $342 million. Ah, the bubble.
A big reason for the dip in 2016 was the fact that Maryland didn’t have what PwC calls a “megadeal,” or a deal over $100 million, said PwC director Brad Phillips. Tenable Network Security’s $250 million raise held that title in 2015. Phillips said one way to look at it is a normalizing year after an outlier in 2015. Last year’s total was roughly equal to 2014, which also hovered around $300,000.

The region tends to be “choppy” like that, Phillips said, since there aren’t as many megadeals here as places like San Francisco, New York and New England. The “D.C. Metroplex” region was actually up after Virginia satellite maker OneWeb posted a $1.2 billion raise.

The lower note to end the year also followed national trends. Investors were writing fewer checks across the country overall in 2016, especially amid the uncertainty surrounding the presidential election during the third quarter, Phillips said. Overall, the amount of many invested across the country dipped about 16 percent.
With deals involving companies like Fugue and Tracx, we’ve already seen four deals worth $74.8 million in the first two weeks of 2017. So perhaps the trend is heading back up. Still, it seems like a megadeal is the key to a big boost.


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