Branch Insurance's $147 million funding round at a unicorn valuation was the biggest in the state for the second quarter, while venture investing nationwide has slowed from the dizzying pace of 2021.
Ohio tech companies raised a collective $400 million in the second quarter, according to data from PitchBook and Columbus Business First. But a faster first quarter has the state almost equal to the first six months of record-breaking 2021, about $1.4 billion through June.
Nationally, startups raised $62.3 billion in venture funding during the second quarter, a 24% decline from the first quarter and a 23% decline from the second quarter of last year, when startups raised $81.9 billion and $81.2 billion, respectively.
U.S. venture activity, while down quarter-over-quarter, still outpaced what startups raised in any quarter pre-2021, a sign of just how frenzied the deal pace was last year.
"2021 was a remarkable year and perhaps an unusual benchmark for VC investment activity," said the quarterly report from PitchBook and the National Venture Capital Association.
The report added that the the pace of VC activity is likely to slow further in the second half of 2022 "as the threshold for closing deals rises and pricing uncertainty extends to the early stages of the investment cycle."
Venture funds prioritizing their existing portfolio companies, rather than increasing their flow of new investments, is also likely to slow overall VC activity, according to PitchBook.
Ohio's VC firms themselves did not raise much in the first half of the year: $101 million for funds in Akron and Cincinnati, according to the report. That doesn't yet reflect the $1 billion for two new funds that Drive Capital closed this month, which is in the third quarter.
The report counted the round for Branch, a digital home and auto insurer in Columbus, even though the investment was from a private equity firm. Typically PitchBook counts those deals in a separate report. The data also included a regulatory filing for West Jefferson-based AmplifyBio, but that company has said the filing reflected a pledge from a year ago. And PitchBook reported a $17 million regulatory filing for Columbus-based HomeTown Ticketing, which said in a news release that the round closed at $75 million.
Initial public offerings were virtually nonexistent last quarter, with just eight VC-backed companies going public in the second quarter. That represented a 13-year quarterly low, PitchBook said.
But there's reason for some optimism. U.S. venture funds have collectively raised $120 billion this year, which is on pace to eclipse last year's record of $139 billion raised by VC funds.
"While this activity is likely mainly a continuation of momentum from 2021, it’s still an encouraging sign around the level of capital availability through the uncertainty that the next few years may bring," the report said.
