Funding / Investing / Venture capital

Philly saw $1.47B in VC deals in 2020, a leading year despite the pandemic

The region followed a national trend of seeing fewer, but larger investments.

Fishtown Analytics cofounder Drew Banin presenting at a meetup at Warby Parker. (Photo courtesy of Fishtown Analytics)
Full disclosure: This quarter's figures may vary slightly, as some deals aren’t accounted for until weeks after the quarterly MoneyTree reports are published.

While 2020 was a challenging year for many businesses, it appears investors weren’t too scared off by uncertainty to funnel money into local startups.

In 2020, the Philadelphia region saw $1.47 billion in venture capital deals, according to a recent PricewaterhouseCoopers (PwC)/CB Insights MoneyTree report. That includes deals made in the city, as well as surrounding counties in Pennsylvania, Delaware, New Jersey and Maryland.

The region’s $1.47 billion went into 73 deals, following a continuing national and local trend of seeing fewer deals made, but higher price tags on those deals, Brad Phillips, a director in PwC’s emerging companies practice, told The report shows that besides 2019 — which was an outstanding year for fundraising at more than $2 billion in deals — 2020 was the best year for deals since the 2000 dot-com-era boom, the report shows.

The strong finish to 2020 was unexpected by some who were afraid that the coronavirus pandemic and looming uncertainty about the state of the world would keep investors from making deals.

“Going into second quarter, there was no question that COVID was going to affect things,” Phillips said earlier this year. “But the market performed well, despite the pandemic. We saw little to no impact.”

And that trend seems to have continued, with $701 million being funneled into the city in investments in 2020, which accounted for around of the region’s total spending. In previous years and quarters, large deals in surrounding suburbs (mostly in biotech or life sciences) pulled more funding and attention from the city.

Another large raise of $380 million from delivery company goPuff also shook up Philly’s typically largest-pulling industries. In 2020, healthcare lead as usual with $607 million in deals, but telecom, which is usually third or fourth on the list, pulled $396 million, accounting for goPuff’s raise. The third-highest industry was internet, raising $295 million.

In the city, some notable tech raises included Fishtown Analytics’ $12.9 million Series A and $29.5 million Series BGuru’s $30 million Series C, Misfits Market’s $85 million Series B, and a $112 million Series C from Imvax, Inc., a Washington Square-based biotech firm.

The state of Pennsylvania ranked ninth in deals, and 10 in dollars spent with $1.61 billion spread across 117 deals. It’s a drop from 2019’s banner year of $2.36 billion, and a significant drop in number of deals, but isn’t concerning, Phillips said, because Pennsylvania’s deals have been trending bigger.

And nationally, the country saw its best year for deals ever in 2020, Phillips said: $130 billion, up 15% since 2019. Nationally, there were 6,022 deals — 318 of which were megadeals (worth more than $100 million) which easily topped 2019’s rate. In Q4, the country also set a record from a quarterly standpoint with 99 megadeals.

Overall, 2020 ended up being an extremely strong year for investors, and companies that landed fundraising — “despite the pandemic, and despite it being an election year, which might normally affect things,” Phillips said.

Companies: Misfits Market / Gopuff / dbt Labs / PricewaterhouseCoopers

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