Funding roundup: These Baltimore-area companies raised millions in the first quarter

Even as the collapse of Silicon Valley Bank and the wider challenges in the economy caused a decline in the venture capital world, Baltimore-area companies weathered the storm and were able to raise millions of dollars in the first three months of the year.

Greater Baltimore raised a total of $83.47 million across 15 deals in the first quarter, according to the latest Pitchbook-NVCA Venture Monitor report released Thursday. That's down from the $153.76 million raised by Baltimore companies in the first quarter of last year, though the 2022 figure is skewed by Facet Wealth's $100 million megadeal. This year, the region has not seen any megadeals.

Nationally, the amount of venture capital activity took a severe dive, according to Pitchbook. Only 19 mega-rounds of more than $100 million occurred in the first quarter of 2023, compared to 98 in the first quarter of 2022. The venture markets overall declined 55% from $82.4 billion in deals in the first quarter of 2022 to $37 billion in the first quarter of 2023.

Despite the decrease, high interest rates and recent Silicon Valley Bank collapse, the report does forecast some hope for the future.

"More realistic valuations, combined with a market awash in talent and new government programs designed to assist company formation in high-growth strategic industries, are all positive signs," the report states.

The biggest Baltimore-area raise in the first quarter of 2023 was from Canton's Apkudo, which secured $37.5 million. The startup inspects phones and laptops to see if they can be repaired or recycled. The business-to-business company has some major clients, like Dell Computers, that are interested in cutting back on electronic waste.

Solar financier Sunstone Credit had the second-largest local raise of the quarter. The solar industry is in an area of massive growth with new federal and state incentives around community solar and other products that reduce the country's reliance on fossil fuels. Sunstone raised $20 million earlier this year with plans to hire 20 new staff members.

The Apkudo and Sunstone Credit raises show that Baltimore can create successful startups outside of its main industry, health care. The health care industry was still responsible for five of the 10 largest deals in Baltimore though, according to Pitchbook. There are some more consumer-driven companies that made the cut as well, like boating startup Marinalife.

The 10 largest rounds in Greater Baltimore in the first quarter, according to Pitchbook:

Baltimore-based tech ecosystem builder Upsurge built its own list of the top rounds in the first quarter. The list has some overlap but also includes several raises that Pitchbook excluded, including a $35 million round by Fzata, an Arbutus biotech company focused on gut disorders, which has not yet closed, and a $25 million stock sale by Columbia public company BigBear.ai. Equitech also counted a $9.79 million round for Ryse Health, a diabetes care startup, which has locations in Arlington, Virginia and Baltimore.

UpSurge CEO Jamie McDonald also said that the Pitchbook report does not include funding from Techstars or several notable investments from the Maryland Technology Development Corp. (TEDCO).

Here are the 10 largest rounds in Baltimore according to Upsurge:

Baltimore raised $165.07 million over 29 deals in Q1 of this year, a small increase from the first quarter of last year, McDonald said. She is optimistic about the venture funding numbers since they prove that the city does not need to rely on megadeals to bring in substantial capital. The investments universities are making in startup commercialization and the benefits of being relatively small compared to markets on the West Coast or in Boston have all enabled Baltimore to buck the national trend of declining funding, McDonald said.

“It does show some broad strength, that we have more companies getting funded,” she said.