Editor’s Note: Chapel Hill data isn’t included as in the individual North Carolina MSA’s reported in the Pitchbook-NVCA data set. However, the entire state is included in the state-level data, so Chapel Hill-based companies are included there. Thus, for the purposes of this article, “Triangle” refers to the Raleigh-Cary MSA combined with the Durham MSA.

RESEARCH TRIANGLE PARK – Surprise. Charlotte led North Carolina in venture capital funding in 2017, not the Triangle. And in RTP deal funding fell for the second consecutive year.

Those are among the details disclosed today as Pitchbook and the National Venture Capital Association (NVCA) released venture capital data from the 4Q 2017 and the year in their PitchBook-NVCA Venture Monitor report. While a full report complete with trend analysis is forthcoming, the sneak peek provides a trove of data comparing North Carolina and four of its regions to other states and regions nationwide.

This is the first in a series of articles from WRAL TechWire focused on parsing apart the data and what they say about trends in the Triangle, the state, and nation. After digging into the data, we’ll hear from investors and entrepreneurs who participated in the 2017 venture capital investments, and finally we’ll compare with data from other reports. First, we’ll look at how the Triangle fares compared to its NC peers in the 4Q 2017 PitchBook-NVCA Venture Monitor Report.

Nation up, Triangle down

 The Pitchbook-NVCA data show North Carolina companies raised $956.31 million in venture capital in 2017.

Triangle-based companies account for 36 percent of the total amount raised in NC in 2017 with $339.4 million raised. The latest Venture Monitor report includes data of North Carolina and data from four North Carolina regions or Metropolitan Statistical Areas (MSAs): Charlotte-Gastonia-Concord, Durham, Greensboro-High Point, and Raleigh-Cary.

Investments are up nationally and statewide, but investments directed to Triangle based companies dipped lower than they’ve been since 2012. The Triangle typically outranks the Charlotte MSA, but fell roughly $130 million behind it in 2017—a result of a large, late-stage raise ($300 million) by the Fintech, 17-year-old company, AvidXchange.

Durham companies led the Triangle with $227.5 million invested to 46 companies in 46 deals. The top earner was the medical device company, Micell Technologies, with a $61.78 late stage raise. The remainder of top five earners are Neurotronik with $23.1 million, Locus Biosciences (http://www.locus-bio.com/) with $19 million, Baebies with $10 million, and Mati Energy with $9.67 million. Of the five top deals, Mati Energy is the only non-life science company to crack the top five.

Tracking VC data

In Raleigh-Cary, the top five investments went primarily to software companies, with one investment to a communications company, Tantalus Systems, and one to the consumer product company FilterEasy. Pendo’s 2Q $25 million Series C raise remained the top raise for the whole year, followed by FilterEasy’s $6.95 million raise, Tantalus System’s $6 million raise, Dropsource at $5.3 million, and Medicom Technologies at $5.23 million.

The total number of deals made remained relatively constant between 2016 and 2017 though. Total, 94 deals were made in both 2017 and 2016—46 in Durham and 48 in Raleigh-Cary in 2017. So, while less funding was invested in the region than in previous years, the number of startups who successfully raised venture capital was equivalent to 2016.

Despite the downward trend, the Triangle’s figures are in sync with national trends identified by NVCA President and CEO who noted in the report’s press release that unicorns and late-stage growth companies account for a large part of the available capital with 22.8 percent of dollars invested going to unicorn companies. With fewer late-stage companies, North the Triangle’s figures are naturally lower than in years prior when unicorns and late stage companies didn’t consume so much of the capital deployed.

In addition, investments in software companies—the focus of a large portion of the Triangle’s startups—decreased in 2017 while investments in life science companies rose for the fourth consecutive year.

VC deals by sector

2015 remains the biggest year for fundraising in both the Triangle and North Carolina, and while the Triangle’s funding dropped again in 2017, North Carolina’s rose and surpassed 2016’s totals. Up next, we’ll look at how North Carolina fared when compared to previous years.