Insights

$1.5 Billion in Venture Funding in 2019 Shows Strength of Maturing North Carolina Startup Ecosystem

CED’s Innovators Report provides a view into the data supporting CED’s Connect to Capital, a strategic investor-entrepreneur matching service.

RESEARCH TRIANGLE PARK, NC, June 5, 2020 – CED is excited to announce the publication of the 2019 Innovators Report. High-growth companies raised $1,493,787,033 in venture funding in 2019 across 184 deals in technology, life science, cleantech, makers and advanced manufacturing & materials.  The total dollar value compares favorably to the record breaking prior year, 2018, when normalizing for the very large outlier of Epic Games’ $1,250,000,000 fundraise. 

Less total deals closed overall, however, but average deal size increased to $8.3 million as compared to the prior year normalized metric of $7.3 million, continuing an existing multi-year trend and echoing national movements.  

The number of earlier stage deals (seed and series A less than $5,000,000) dropped below 150 for the first time in four years to 140.  

“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.  Perhaps a silver lining in the current pandemic and subsequent unemployment is new ideas and perspectives as more people embrace entrepreneurship,” stated Hunter Young, Director, Capital at CED.

Interestingly, the tech and life science sectors were at near parity in terms of total dollars raised with both close to $700 million.  2019 was highlighted by three nine-figure transactions, with AskBio ($235,000,000), AvidXChange ($130,000,000) and Pendo $(100,000,000) all celebrating momentus 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 Hunter Young.  “For perspective, in 2013 North Carolina companies raised less than $500 million collectively, and we are now consistently at three times that figure.”

Investor Attention

In lockstep with the decrease in overall deals, the number of unique institutional funders dropped to 137.  However, there was still national and global intrigue in North Carolina with 8 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

Further, the favorable private fundraising environment was a factor in the decrease in exit transactions, with 20 acquisitions and one IPO, from Precision Biosciences in March 2019.  

“Companies are staying private longer as there is more access to growth capital and perhaps a desire to ‘go big’.  There were still large nine-figure acquisitions with the deals for Samanage, Precision Lender and MapAnything”

Want to know more?  

Join us for a look at the 2019 Innovators Report on June 25 at 10am 
Raising Money | Register now!

Join Hunter Young and Jay Bigelow for a free Zoom session as they dive into the 2019 Innovators Report and take a look back at the deals, funding, investors and exits. Then explore the coming year for entrepreneurial companies and challenges that may lie ahead. Hear from several companies that have raised, or plan to. Submit a question now and it may be selected by Hunter or Jay and answered live during the session!

About

CED Innovators Report

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 Pitchbook, the National Venture Capital Association, the North Carolina Biotechnology Center, Small Business Technology Development Center (SBTDC), NC IDEA, Ernst & Young and PricewaterhouseCoopers MoneyTree Report to gather, analyze and report these data. In addition to absolute numbers, the report uncovers trends in the entrepreneurial sector.

About CED

CED connects entrepreneurial companies with high-value resources to accelerate business growth. CED services and programs (including Connect to Capital, Venture Mentoring, and Venture Connect) empower member companies to go further faster. Partners of CED are fueling tomorrow’s success stories by investing in today’s ecosystem. 

CED is celebrating over 35 years of services to North Carolina Entrepreneurs. The original 15 business leaders began CED with the ideas of encouraging the formation and development of businesses in North Carolina.  Working both directly and indirectly through workshops, programs, conferences, aligning the ecosystem and lending support when needed, CED has played an important role as a catalyst for change. 

Read more at https://local.40th.cednc.test/