Wisconsin’s early-stage companies raise record $483 million in 2020

Wisconsin’s early-stage firms raised more than $483 million in 2020, representing the most capital raised in the state for a single calendar year.

Funds were raised across 110 venture capital deals and four crowdfunded deals – investors included venture capital firms, angel investors, accelerator programs, crowdfunding campaigns and private equity firms, according to a report released by the Wisconsin Technology Council this week.

The largest deals reported were SHINE Medical Technologies ($80 million), Fetch Rewards ($80 million), NorthStar Medical Radioisotopes ($70 million) and Sunvest ($50 million), accounting for $280 million of the state total. SHINE, Fetch and NorthStar were also included in Wisconsin’s top deals in 2019.

Early-stage companies raised about $30 million more in 2020 compared to 2019, although total deal volume was down from 123 in 2019. The average round size was $4.2 million, up from $3.8 million in 2019, and the median round size was $1 million, up from $700,000 in 2019.

Removing the top four “mega deals” in 2020 brings the average round size down to $1.8 million and the median round size to $940,000, according to the report.

Also noteworthy is that about 66 companies received first-time funding in 2020, up from 52 in 2019 and 32 in 2018. This suggests that more Wisconsin startups are venture-backed, which is an important element of a healthy and robust startup ecosystem.

A five-year rolling average of venture dollars raised in the state continues to trend positively, increasing by 75% since 2015. While 2020 metrics suggest Wisconsin’s venture capital ecosystem is maturing, the state still lags behind others in the Midwest including Michigan, Minnesota, Ohio, Illinois, Indiana and Missouri.

Michigan recorded $3.1 billion in investments while Illinois, Minnesota and Ohio were each billion-dollar-plus investment hubs in 2020, according to PitchBook, a firm that tracks data on venture and private equity deals.

“Other states are doing more to support their early-stage economies through policy initiatives such as ‘funds of funds’ that lever public and private investment,” Wisconsin Technology Council president Tom Still said in a statement.

A $100 million fund of funds was proposed in Wisconsin, but lawmakers left the proposal out of Governor Tony Evers’ state budget proposal last month.

Additional data highlights:

  • Over 50% of companies raised at least $1 million in funding.
  • Health care and information technology composed two-thirds of all deals and dollars.
  • 12% of 2020 deals were led by women, down 22% in 2019. The national average ranges from 20% to 25%.
  • Fifty-five out-of-state investors took part in 31 Wisconsin deals.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display