The three largest funding rounds of the third quarter among Chicago's tech startups were all in the health-care space.
That's according to data from the latest PitchBook-National Venture Capital Association Venture Monitor report, which showed that life sciences VC deal counts have continued to decline in 2024 across the United States, with a greater percentage of deals getting done in the later stages.
Of the 10 largest funding rounds for Chicago tech startups in the third quarter, half were in the health-care space, including Vanqua Bio, which recently announced positive results for its Parkinson's treatment. The top 10, according to the Pitchbook-NVCA report:
- Zing Health — $140 million later-stage VC
- Vanqua Bio — $45 million later-stage Series B at a $270 million valuation
- Synapticure — $40.1 million later-stage VC
- Bitnomial — $27.8 million later-stage Series C at a $227.8 million valuation
- Amount — $24.6 million later-stage VC
- Syntax Bio — $20 million later-stage Series A
- K1x — $20 million early-stage Series B at a $100.5 million valuation
- Chowbus – $20 million later-stage Series D at a $135 million valuation
- Homethrive — $13.2 million later-stage Series B2
- Inventables — $11.1 million later-stage VC at a $23.8 million valuation
The rundown comes on the heels of global pharmaceutical company Immedica Pharma AB announcing plans last month to establish its U.S. headquarters in Chicago.
John Flavin, founder and CEO of local venture-capital firm Portal Innovations, thinks the sector is in its early innings when it comes to becoming a staple of Chicago.
"There's been no question that following what was a historic biotech boom leading into and through Coivd, if you look at the second half of this year, IPOs are picking up steam, interest rates are coming down, and that's a national trend that I think will trickle into Chicago," Flavin told Chicago Inno.
IPO freeze continues to slow traffic at the top
On a national basis, PitchBook analysts noted in their report that "the growing backlog of companies currently unable or unwilling to exit has caused the U.S. private company inventory to balloon to 57,674, a record high."
Their new data shows that venture deal activity in Chicago declined from Q2 to Q3.
In the three months ending in September, Chicago startups closed nearly 50% fewer deals — 59 deals in Q3 compared to 88 deals in Q2. Total capital invested in the third quarter shrank as well, to $452 million, down more than 30% from $592 million in Q2.
There is, however, evidence of an uptick in some activity compared to last year. Chicago VC firms have closed 15 funds in 2024 for $4.35 billion, up from $984 million across 20 funds in 2023.
Most of that $4.35 billion came from Arch Venture Partners' close of its new $3 billion fund earlier this year. The firm invests in biotech companies working to detect and cure diseases.
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