Early-stage startups throughout much of the U.S. are able to raise larger sums today than any other point in at least a decade, and there are more early-stage rounds than ever, both in North America and globally. (Note: â€œEarly-stageâ€� is defined here as Series A and Series B rounds, plus smaller rounds from several other round types, including equity crowdfunding and convertible notes.)
In analysis published earlier this week, we found that the nationwide average early-stage deal grew more than 20 percent between 2017 and 2018. We quantified that companies on the coasts raise more than their inland counterparts and found some indications that the Midwest lags the rest of the nation.
To find this and more, we aggregated round size data for more than 30,000 early-stage venture rounds struck with U.S.-based companies between the start of 2008 and the end of 2018. We segmented the data by theÂ U.S. Census Bureauâ€™s map of regions and â€œdivisionsâ€�Â (basically, subregions by a different label), took the mean (average) early-stage deal size for each calendar quarter and displayed each region against the national average.
Below, you can see how early-stage rounds around the country compare to the national average. To make it easier to see trends, we display a two-period simple moving average line alongside individual data points.
Although the average has certainly crept up, part of that is attributable to a newer trend in companies raising huge sums of money. In the report, we indicated that many of the largest early-stage rounds were raised by companies in the West and Northeast. But startups in these regions donâ€™t hold a monopoly on raising lots of money from venture capitalists.
Here, we wanted to highlight some of the biggest early-stage rounds struck by Midwestern and Southern companies. After all, the coasts tend to dominate the mediaâ€™s conversation concerning tech. So, hereâ€™s some love for the middle of the country, and its biggest deals:
The five biggest early-stage VC rounds raised by Southern startups in 2018 and January 2019
- Hailing from Atlanta,Â Knock, a company aiming to help homeowners streamline the process of trading up for a new house, raisedÂ $400 million in Series BÂ funding in a deal announced on January 15, 2019. Crunchbase NewsÂ covered the transaction, which was led byÂ Foundry GroupÂ and was composed of an undisclosed blend of equity and debt.
- Viela Bio, based in Gaithersburg, Maryland (which, by the Census Bureauâ€™s definition, is in the South), is a clinical-stage therapeutics company developing novel molecules for treating severe inflammation and autoimmune disorders. The company announcedÂ $282.2 million in Series A venture fundingÂ in February 2018. Viela BioÂ was spun outÂ of biopharmaceutical conglomerateÂ AstraZeneca.
- Another company entering the home-flipping market is Austin-basedÂ Bungalo, which announcedÂ $250 million in Series A fundingÂ back in September 2018. Austin-based financial services companyÂ Amherst HoldingsÂ and its real estate investment subsidiary were the sole sources of capital on the deal.
- Another Atlanta company,Â Bakkt, raisedÂ $182.5 million in a Series A roundÂ announced on December 31, 2018. A number of blockchain-focusedÂ investors participated in the round, alongside Microsoftâ€™s early-stage VC armÂ M12Â and theÂ Boston Consulting Group.
- Crunchbase News broke the storyÂ of Raleigh, NC-based gene editing companyÂ Precision BioSciencesâ€™sÂ $110 million Series B roundÂ based on an SEC filing spotted back in June 2018. The companyÂ formally announcedÂ the round several weeks after the initial filing. The round was led byÂ ArrowMark Partners, which was joined byÂ nearly two dozen other new and prior investorsÂ that participated in the round.
The five biggest early-stage VC rounds raised by Midwestern startups in 2018 and January 2019
- Bind, a Minneapolis-based â€œon-demandâ€� health insurance company, raisedÂ $60 million in a Series A roundÂ in February 2018. The company offers a core plan to cover the basics, plus the option to purchase coverage for, say, a surgery, only when that coverage is needed.
- Sollis Therapeutics, based in Columbus, Ohio, is developing non-opioid pain treatments. The pharmaceutical company raisedÂ $50 million in a Series AÂ round announced in April 2018.Â Opioid overdoses killed 200 Americans per day in 2017. With nearlyÂ 33 deaths for every 100,000 people, Ohio is one of the states worst-affected by the surge in opioid abuse.
- Detroit-based sneaker and streetwear marketplace companyÂ StockXÂ coppedÂ $44 million in Series B fundingÂ back in September 2018.Â Battery VenturesÂ andÂ GVÂ co-led the round.
- Clearcover, a Chicago-based auto insurance marketplace platform, raisedÂ $43 million in a Series BÂ round.Â Crunchbase News coveredÂ the transaction, which was led byÂ Cox Enterprises. Local firmÂ LightbankÂ and angel ringÂ Hyde Park AngelsÂ participated in the round.
- TradingView, also based in Chicago, raisedÂ $37 million in Series B fundingÂ announced in May 2018. The company builds data analysis and social networking tools for financial market participants.
Itâ€™s true that the Bay Area is responsible for a huge chunk of theÂ supergiant venture market, but it by no means accounts for all of it. The above should lay to rest the idea that thereâ€™s no tech in between EWR and SFO.
Source: Techcrunch Disrupt