Venture capital investment heated up nationwide last year with a surge in megadeals, while the Sunshine State struggled to attract the green.
Dragged down by an anemic fourth quarter, venture capitalists injected $460.8 million into 58 deals in Florida in 2015, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, which was released on Friday. In the fourth quarter, $31.62 million flowed into the state.
Florida’s total was about half of its 2014 total, but that’s because of Magic Leap’s 2014 megadeal of $542 million. The Plantation-based technology company is reportedly raising another $827 million, so 2016 may be another record year for Florida. Still, Florida’s 2015 total was in line with results for 2013. With the exception of 2014, it was the best showing since 2007.
Don’t break out the champagne, though: Florida’s take was a tiny slice of the total venture capital pie in 2015 — less than eight-tenths of 1 percent for the country’s third most populous state, according to MoneyTree numbers. Florida ranked 14th among states in venture funding in 2015.
The 2015 top deals from South Florida were a triple-play by health-tech companies: $50 million for Fort Lauderdale telehealth company MDLIVE; $38 million for electronic medical records software company Modernizing Medicine of Boca Raton; and $22.9 million for Dania Beach-based Orthosensor, maker of smart orthopedic devices.
Nationally, the venture capital ecosystem deployed $58.8 billion in 2015, up from $48 billion in 2014 and the second highest full year total in the last 20 years, according to the MoneyTree Report, based on data provided by Thomson Reuters. There were 74 megadeals (investments of $100 million or more), compared with 50 in 2014, yet seed-stage investments were active, too. “While a handful of unicorns and late-stage funding rounds by nontraditional investors continue to grab the headlines, more than half of all deals in 2015 went to seed and early stage companies, with more than 1,400 companies raising venture capital for the first time,” said Bobby Franklin, president and CEO of NVCA.
For the fourth quarter of 2015, venture capitalists invested $11.3 billion into 962 deals across the country, down 32 percent in dollars and 16 percent in deals compared with the third quarter. The fourth quarter also marks the eighth consecutive quarter of more than $10 billion of venture capital invested in a single quarter, but also represents the smallest amount invested since the third quarter of 2014. As has been the recent trend, the software industry continued to receive the highest level of funding of all industries in the fourth quarter and year.
“Companies with innovative, disruptive technologies and business models continue to catch the eyes of investors,” said Tom Ciccolella, U.S. Venture Capital Market Leader at PwC. “The fourth quarter’s largest deals included startups that deploy technologies to challenge incumbents in the financial services, education, retail and consumer industries.”
In South Florida, the fourth quarter yielded $11.4 million in venture investment, for a total of $253 million for the year. That was 55 percent of the state’s total but just 0.4 percent of the national total.
In the fourth quarter, Fort Lauderdale-based BioTrackTHC, which develops and sells tracking software for the cannabis industry, received $5 million in funding from Greenfield Capital Partners, followed by OrthoSensor, which received $3.88 million (investors undisclosed). Miami-based Raw Shorts, an explainer video software company, received $1.27 million from New World Angels and other investors, Miami medical device company InnFocus took in $1.08 million (investors undisclosed); and Boca Raton-based Fresh Meal Plan received $150,000 from Tamiami Angel Fund, according to the MoneyTree report.
MoneyTree Report results are available at www.nvca.org.
Nancy Dahlberg; 305-376-3595; @ndahlberg