Venture capital investment and tech company IPOs nationwide have cooled off so far in 2022 after a scorching 2021, but Ohio appears to be bucking the trend.
In Northeast Ohio, one March transaction — the $204 million funding of Society Brands, the Amazon aggregator in Canton, Ohio — pushed up the region's venture capital investments 189% in the first quarter from the year-ago quarter, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association.
For all of Ohio, the nearly $71 billion combined value of VC investments in startups and later-stage tech for the first quarter was lower than in any quarter of record-breaking 2021 — but still higher than the levels of prior years, according to the Venture Monitor report.
The estimated 4,822 deals from January to March were a record high — indicating smaller investments across more companies.
Ohio appears to be bucking the trend, mainly because of three mega-rounds so far that alone total more than the state's $454 million in the first quarter 2021. Those were:
- Enable Injections, of Cincinnati, $215 million in January.
- Astronomer, of Cincinnati, $213 million in March. Southwest Ohio has seen three nine-figure rounds in the past seven months, sister publication Cincinnati Business Courier reported.
- Society Brands, of Canton, $204 million in March.
But the state's only IPO so far this year is Cincinnati's Blue Water Vaccines in February, which has seen its share price drop 80% through early April, the Courier reported.
And IPOs for venture-backed companies have slowed drastically this year after many newly minted stocks struggled last year, including Columbus-based Root Inc.
While VC deals in Central Ohio slowed markedly in the first quarter after being responsible for $1.55 billion of the state's record $2.4 billion in investments last year, deals in Northeast Ohio picked up, thanks to the Society Brands investment.
Through March, Central Ohio startups raised just more than $155 million, according to Columbus Business First research of announced rounds and regulatory filings.
Using comparable PitchBook data, Northeast Ohio completed 15 top deals in the first quarter, totaling $272 million. That compared to 12 top deals that totaled $94 million in the first quarter of 2021.
The Cleveland, Akron and Canton combined statistical area raised a total of $307.5 million during the first quarter, according to an analysis by Cleveland-based venture developer JumpStart Inc., which has access to the entire PitchBook database.
That was second only to the Cincinnati, Wilmington and Maysville area, which raised a total of $504.5 million in venture capital during the first quarter, according to the JumpStart analysis.
Society Brands
The Amazon aggregator raised $204 million in debt and equity in March to acquire e-commerce consumer product brands with a heavy concentration on Amazon.
Cleveland Kitchen
The Cleveland maker of fermented foods such as sauerkraut, pickles, kimchi and salad dressings, which raised $1 million in October, raised $17 million in March, according to the Venture Monitor report.
Remesh
The Cleveland-based AI-powered digital-conversation platform that's used by companies for market research and human-resource management, raised $11 million in January, according to Venture Monitor.
Klutch Cannabis
The Akron-based cannabis cultivator and processor separated from Massachusetts-based Calyx Peak Cos. in 2020 and appears to be looking to secure dispensary licenses, according to GreenMarketReport.com. Klutch raised $11 million in February, according to Venture Monitor.
MediView
The health tech company located in Cleveland Clinic's Global Innovation Center is integrating augumented reality, remote collaboration and data analytics to create diagnostic imaging and surgical navaigation systems aimed at improving patient care. MediView raised $10 million in March, according to Venture Monitor.
Cleveland Business Journal staff writer Mary Vanac contributed to this report.
