Baltimore / Investing / Venture capital

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

According to data from the PwC/CB Insights MoneyTree report, the state saw the total number of venture dollars invested in companies rise after a dip in the first quarter of 2019.

Money. ( file image; source unknown)

Venture funding raised by Maryland companies took a big jump in the second quarter of the year, as companies in the state raised a total of $226 million.

That’s a 180% increase over the first quarter total of $80 million, according to data from a PwC/CB Insights MoneyTree report. The number of deals also increased, from 19 in the first quarter to 21.

When it comes to overall totals, it marked a “a significant rebound for the state,”  said Brad Phillips, a director in PwC’s Emerging Company Services practice. It came after totals dipped in Q1 coming off a year in 2018 that saw the highest VC haul since 2001.

It also followed an overall trend that makes judging a single quarter difficult, as Maryland consistently sees up-and-down totals from quarter to quarter in the region.

Phillips also noted that three of the top five deals in the region were for Maryland-based companies, as well as 62% of the funding and more than half the number of deals within the DMV region. Those three biggest deals all came from Gaithersburg-based companies in the form of a $75 million Series B investment in biotech company Viela Bio, a $50 million Series B for on-demand manufacturing marketplace Xometry and a $22 million Series C for biopharmaceutical company Sirnaomics. Overall, the state ranked 12th in the U.S. for number of dollars invested and 11th for number of deals.

In Baltimore, deals we covered included the recent $5 million Series A for Holabird Avenue-based ecommerce startup Whitebox, a $4 million Series A for medical education startup Osmosis, May’s $2.5 million seed round for South Baltimore-based malvertising prevention startup and $600,000 for UMB-born medical device company NextStep Robotics.

Nationally, the trend remains toward larger rounds. Phillips said the national totals for “megarounds” over $100 million were the highest ever, with 64 total rounds. Seed rounds for earlier stage, on the other hand, continue to fall, dropping to the lowest level since 2014. These tend to create more “top-heavy” data, where a smaller number of high-dollar deals will be key in how funding totals appear, Phillips said.

One of those megarounds came in a deal wasn’t included in the regional version of the MoneyTree report but will have an impact in Baltimore: Thrive Earlier Detection Corp.’s $110 million funding round. The cancer blood test company has an executive team in Boston where it’s headquartered, but was created out of the Vogelstein Lab at Johns Hopkins Medicine and is planning to grow an R&D base in the city.

Even as it didn’t have a megaround recorded in the data, Maryland showed the higher-dollar deals can drive totals up, as Viela Bio and Xometry accounted for 55% of the money invested, Phillips said.

But there remains benefit for having lower totals over a number of companies, noting that Baltimore showed six companies over $1 million on the report.

“Now we’ve got six companies that can grow and go back out for that larger round down the road,” he said.

And it’s worth watching the second two quarters of the year.

“Over the last several years in this region we have had a significantly higher number of dollars invested in the second half of the year as opposed to the first half,” Phillips said.


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