RESEARCH TRIANGLE PARK – North Carolina entrepreneurial companies raised roughly $1.5 billion in 2019, according to the Council for Entrepreneurial Development’s (CED) Innovators Report released today.
The sum compares “favorably” to the year prior, it noted, which saw a record-breaking $2.749 raised buoyed by a $1.25 billion investment by Cary-based Epic Games.
In total, 184 deals closed across technology, life science, cleantech, makers and advanced manufacturing and materials. That equated to less deals overall; however, average deal size jumped to $8.3 million – up from $7.3 million in 2018, “continuing an existing multi-year trend and echoing national movements.”
On the downside: the number of earlier stage deals (seed and series A less than $5,000,000) dipped below 150 – the first time in four years – to 150.
“For the long-term health of the region, I hope this is just a brief anomaly, and that more attention is given to the earliest, albeit more risky, businesses,” said Hunter Young, CED’s director of Capital.
“Perhaps a silver lining in the current pandemic and subsequent unemployment is new ideas and perspectives as more people embrace entrepreneurship.”
2019 also marked a stronger balance between the tech and life science sectors, with each raising $700 million.
As is the case in most years, the bulk of venture capital activity occurred in the Triangle, with the life science density in Durham/RTP helping the area raise nearly half of the state’s total dollar.
The year’s total also included three nine-figure transactions, with AskBio ($235,000,000), AvidXChange ($130,000,000) and Pendo $(100,000,000) all celebrating momentous fundraises.
“2018 was a record year that is hard to top, but 2019 is still the second largest fundraising year since the turn of the century – a gem in its own right”, added Young. “For perspective, in 2013 North Carolina companies raised less than $500 million collectively, and we are now consistently at three times that figure.”
Who are the investors?
In lockstep with the decrease in overall deals, the number of unique institutional funders dropped to 137.
However, the report noted that there is still “national and global intrigue” in North Carolina with eight international investors and over two-thirds of all funders coming from outside of the Southeast.
Behind the 30 investors local to North Carolina, the next largest grouping came from California with 24.
Traditional venture capital funds represented just over half of the investor base in the state.
Keeping control, staying private
Meanwhile, companies are staying private longer with a decrease in exit transactions.
The report noted 20 acquisitions – including large nine-figure acquisitions with the deals for Samanage, Precision Lender and MapAnything.
There was only one IPO – from Precision Biosciences, in March 2019.