North Carolina Entrepreneurs Raise $169 Million in Equity for First Quarter of 2016

CED’s digital ‘Innovators Report’ provides sector-specific data for 2016 fundraising and final totals for 2015 entrepreneurial activity, including grants and awards

DURHAM, NC, May 24, 2016 — The Council for Entrepreneurial Development (CED), the largest and longest-running entrepreneurial network in the nation, today released the 2016 first quarter equity fundraising totals through its digital Innovators Report. CED’s Innovators Report tracks technology-based entrepreneurial activity in North Carolina.

The 2016 first quarter update shows that 32 North Carolina entrepreneurial companies in the technology, life science and cleantech sectors collectively raised $169 million in funding through 33 equity deals. These deals involved 45 unique institutional investors. This report includes venture capital, angel, corporate, growth equity, family office and strategic investments.

“In the first quarter of 2016 we continued to see emerging North Carolina companies get funded and maintained strong interest from out-of-market investors,” said CED President and CEO Joan Siefert Rose. “Given the national fundraising trends and current economic climate, we didn’t expect this quarter to keep up with the record-setting pace of 2015. Instead we saw a solid performance that will help many of this state’s companies continue to grow and scale.”

The funding total for Q1 2016 is the lowest quarter since Q3 2014, when companies only raised $85 million. The first quarter of 2016 is also the weakest start to a year since the first quarter of 2013, when companies raised $82 million. CED began tracking funding data through the Innovators Report in 2013.

Funding Breakdown

In Q1 2016, 32 North Carolina entrepreneurial companies raised $168,960,412 through 33 equity deals. Life science companies raised over twice as much as tech companies. Those totals, broken out by sector, are as follows:

  • Tech: 14 companies brought in nearly $52 million
  • Life Science: 17 companies completed 18 deals, totaling over $113 million
  • Cleantech: 1 company raised almost $4 million
  • Advanced Manufacturing and Materials: CED’s data did not show any companies completing deals in the first quarter of 2016.

“North Carolina continues to see solid investment activity for seed stage companies,” said Dhruv Patel, CED’s Director of Investor Relations. “The report does show, however, a slowdown for companies looking to raise Series A funding and beyond, which is consistent with what other regions are experiencing across the country.”

Investor Activity

Investor interest from outside the state was a continuing trend. North Carolina companies attracted equity investments from 45 unique institutional investors in Q1 2016, including 37 out-of-market investment funds. The top U.S. states for investors were:

  • California, 11
  • North Carolina, 8
  • Illinois and Massachusetts, 3 each

There were 5 international investors that participated in deals. These investors are based in Belgium (1), Canada (1), China (2) and the United Arab Emirates (1).

Exits

Eleven (11) entrepreneurial companies were involved in mergers, acquisitions or buyout activity in the first quarter. The most notable exits were:

  • Biologics, Inc., acquired by McKesson Specialty Health
  • clearXchange LLC , acquired by Early Warning
  • Clintrax, acquired by Copernicus Group IRB
  • Clinverse, Inc., acquired by Bioclinica
  • Consolidated Asset Recovery Systems, Inc, acquired by Greenridge Investment Partners
  • ESP/SurgeX, acquired by AMETEK

Update: Grant/Award Totals Increase 2015’s Banner Year of Funding Over $1.2 Billion

Complete grant and award data for North Carolina entrepreneurial companies was made available in late April, allowing CED to update the Innovators Report totals for 2015. Adding to a banner year of funding, North Carolina companies received $71,125,928 in grants and awards, which brings the funding total for 2015 (including equity, grants and awards) to: $1,253,479,501.

Grant and award totals for 2015 by sector:

  • Tech: $14,956,940
  • Life Science: $44,913,703
  • Advanced Manufacturing and Materials: $9,976,705
  • Cleantech: $1,278,580

CED’s proprietary Innovators Report tracks data not readily available elsewhere. CED leverages its deep relationships with companies and investors, and its partnerships with organizations and sources such as the National Venture Capital Association, the North Carolina Biotechnology Center, Small Business Technology Development Center (SBTDC) and PricewaterhouseCoopers MoneyTree Report to gather, analyze and report these data. In addition to absolute numbers, the report uncovers trends in the entrepreneurial sector.

CED Innovators Report: www.cednc.org/innovatorsreport

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