Baltimore-area venture capital deals plateaued in the second quarter in line with a national slowdown, but a mega-deal in June pushed the region’s investment total above last year’s second-quarter numbers.
Greater Baltimore companies raised $291.45 million from 26 deals in the second quarter, according to Pitchbook-NVCA Venture Monitor’s report released Thursday. That’s nearly $90 million more than the $202.5 Baltimore raised in the second quarter last year, though that increase is due in large part to Ellicott City cybersecurity firm Blackpoint Cyber’s $190 million mega-deal in June, the first mega-deal in the area so far this year.
Aside from the Blackpoint deal, the region raised $101.45 million in the second quarter — roughly half of what Baltimore companies raised in the second quarter of 2022.
Baltimore is not alone. According to Pitchbook, venture capital is leveling off nationwide after a steep decline in 2022. There were $39.8 billion in deals in the second quarter this year, marking a 48% decrease from $76.7 billion in the same quarter of 2022. Mega-deal activity also remained low nationwide in the second quarter with 62 deals compared to 157 in 2022, according to Pitchbook’s data.
The report identifies high interest rates as one of the main barriers to venture capital activity but says that government action can promote a healthy investment ecosystem in the coming years.
“The State Small Business Credit Initiative has allocated $10 billion across the country into funds where venture is playing a significant role,” the report says. “Furthermore, programs such as the Inflation Reduction Act and the CHIPS and Science Act offer considerable incentives for investments in fields such as deep tech and climate tech.”
Blackpoint Cyber, which works with third-party companies that remotely manage the day-to-day operations of a company’s internet technology infrastructure, scored the largest raise in the Greater Baltimore region in the second quarter. Another cybersecurity company, Huntress, secured the second largest round in May with a $60 million deal.
In addition to cybersecurity companies, health care and biotech firms took a majority of the 10 biggest deals in the second quarter.
The 10 largest rounds in Greater Baltimore in the first quarter, according to Pitchbook:
- Blackpoint Cyber in Ellicott City: $190 million
- Huntress in Ellicott City: $60 million
- Scene Health in Baltimore: $16.7 million
- Emit Imaging in Baltimore: $5.9 million
- Rampart Communications in Linthicum: $5 million
- BreachBits in Annapolis: $3.2 million
- AlarisPro in Baltimore: $2.3 million
- Hord Coplan Macht in Baltimore: $1.8 million
- EpiWatch in Baltimore: $1.5 million
- Longeviti in Hunt Valley: $1.2 million
Baltimore tech ecosystem builder Upsurge also compiled a list of the second quarter’s top deals, including multiple deals the Pitchbook data exclude like Towson-based Curio Wellness’ $4.2 million raise and Baltimore-based CoapTech’s $3 million debt round. The Upsurge roundup counts funding sources like debt and grants that Pitchbook does not include.
The 10 largest rounds in Greater Baltimore, according to Upsurge:
- Blackpoint Cyber in Ellicott City: $190 million
- Huntress in Ellicott City: $60 million
- Scene Health in Baltimore: $16.7 million
- Emit Imaging in Baltimore: $5.9 million
- Rampart Communications in Linthicum: $5 million
- Curio Wellness in Towson: $4.2 million
- CoapTech in Baltimore: $3 million
- Infinite Biomedical Technologies in Baltimore: $2.7 million
- AlarisPro in Baltimore: $2.3 million
- Hord Coplan Macht in Baltimore: $1.8 million
Upsurge CEO Jamie McDonald said Baltimore raised almost $301 million across 40 deals in the second quarter, nearly a $100 million jump over the second quarter of 2022 thanks to the two large cybersecurity deals. Despite the totals being top heavy, McDonald said Baltimore’s commitment to diverse companies gives the city a leg up on other tech cities. Baltimore logged $429 million in deals in the first half of 2023 according to Upsurge, up from $362 million in the first half of 2022.
“To be up relative to the first half of last year in a meaningful way is continued evidence of Baltimore’s progress as a tech ecosystem,” she said.
