The Richmond area had a knock-out year for innovation, including a $13 million round of funding for a local startup at the end of 2019 and the $117.5 million acquisition of a Charlottesville-based IT company.
The VividWinds acquisition that took place in December was logged as the No. 3 exit that happened in the DC-VA-MD-WV region, according to the newly released report by PitchBook and the National Venture Capital Association that covers the fourth quarter of 2019.
“we have a number of companies that are well-positioned to do really great things this year.”
These were the top 10 Richmond area funding rounds logged in the Q4 PitchBook-NVCA Venture Monitor report:
TemperPack – $13 million; Later-stage VC, Series 2
Ledbury – $4 million; Later-stage VC, Series C
Cupron – $2 million; Later-stage VC
Fringe – $1 million; Angel (individual)
Hardywood Park Craft Brewery – $1 million; Angel (individual)
O’MY Foods – $1 million; Angel (individual)
Naborforce – $1 million; Seed round
Virago Spirits – $1 million; Angel (individual)
STAC – less than $1 million; Angel (individual)
Kamana – less than $1 million; Angel (individual)
The TemperPack deal was also listed as the No. 2 deal that happened in the entire state of Virginia this quarter.
The categories that made up the list of the top deals in Richmond this quarter were overwhelmingly centered around two industries: materials and resources; and products and services, both B2B and B2C, reflecting a growth opportunity within Richmond for those industries.
“The Richmond region, historically, has always been a testbed for products,” Carrie Roth, president and CEO of Activation Capital said. “[The materials and resources and products and services] industry sectors are certainly a strength for us, but it also launches other industry sectors that support them, such as logistics or advanced manufacturing.”
These trends reflect a positive year ahead for innovation in Richmond.
“I think that we have a number of companies that are well-positioned to do really great things this year,” Roth added. “I also think that we need to be looking at not only capital investment but at how many startups there are in the talent pipeline and making sure that we have the human capital to go along with the financial capital. The two go hand in hand.”
Virginia as a whole saw $114.07 million invested in deal flow in Q4 and a total of $1.16 billion invested in 2019 through 204 deals. This is up from a 191 deal flow in 2018.
Virginia also had $234 million in exit activity in Q4 and $1.36 billion in 2019 as a whole. Additionally, Virginia saw $240 million in fundraising deals in 2019, down from $287.59 million in 2018, although the trend over the last several years has generally been positive.
“We used to see Richmond as a place that had all of the right ingredients but didn’t yet have the catalyst to bring them all together,” Laura Markley, managing director of NRV Richmond. “Now I think we are hitting that critical mass point where the organizations that are here are supporting ventures at a variety of stages and the organizations are really working together to make that kind of foundational ecosystem that we really need for Richmond to be on the map for startups.”
Related Post
The top 10 Richmond startup funding rounds of Q1
Richmond area startups raised a total of $22.5 million in venture capital during the first quarter of the year, according to a new report by the National Venture Capital Association and PitchBook. That's an...
“Our belief on the future success of Richmond is not only having the elements to support an ecosystem but attracting the startups themselves,” Markley added. “Richmond is in a great place to make a quality of life play and a cost of doing business play, providing a welcoming environment for entrepreneurs and companies.”
Markley also added that there is a growing interest in attracting companies that “are growing quickly but at their bones are a healthy, operating company that can turn a profit and grow in a healthy way.”
National Trends
U.S.-based companies raised about $136.5 billion across more than 10,700 deals in 2019, PitchBook reported.
Last year’s VC activity was slightly lower than 2018, when U.S. companies raised $140 billion across 10,500 deals. The dip was due to a slower fourth quarter, PitchBook says. But overall, the shows that venture capital raised by U.S. companies has been steadily rising since 2006.
Early-stage deals (chart courtesy of PitchBook and NVCA)
California startups saw the most funding of any state, with companies raising more than $63 billion across 3,623 deals. The state had several multi-million-dollar deals from San Francisco companies such as DoorDash, which raised $700 million last year, and Databricks, which raised $400 million in October.
Following California was New York, whose startups raised more than $27 billion across 1,315 deals, and Massachusetts, which saw more than $10 billion raised in 2019 across 740 deals.
When it came to startup exits, 2019 hit a new record for U.S. VC exit value, coming in at $256.4 billion across 882 liquidity events. One of the year’s largest exits was Honey, which was acquired for $4 billion by PayPal in November.
Female-founded companies saw record activity on both a capital and deal count basis, raising $18 billion across 2,184 deals in 2019, compared to nearly $17 billion across 2,057 deals in 2018.