Central Ohio startups in 2023 raised no venture capital rounds of $100 million or greater for the first time since 2017.
But the region also saw its biggest tech acquisition since CoverMyMeds, also in 2017, which sold for an eventual $1.44 billion to healthcare giant McKesson Corp.
The more than $600 million acquisition of Grove City gene therapy startup Forge Biologics Inc. closed this month. Tokyo-based Ajinomoto Company Inc. said in a release the final value of the deal is still to be determined as equities are priced, but it has acquired all of the company's privately held stock.
The region followed the national slump in VC dealmaking and exits for 2023: The number of investments declined by 28% in the first three quarters compared to the same period in 2022, PitchBook reported this month. Meanwhile the number of active investors plummeted by 38% in that time, back to the level of 2018, PitchBook data indicate.
In the Columbus region, the largest fundraising announced for the year – $91 million by clean energy startup Koloma Inc. – actually was raised over a few tranches starting in 2022 while the Ohio State University spinoff was still in stealth mode. Not only that, since being incorporated in Dublin, the HQ has moved to Denver; Koloma still has a Columbus laboratory.
Overall, VC and private equity rounds that were publicly announced totaled $346 million for the year, according to our research. That's more than half the $613 million in 2022 and a fraction of the record $1.4 billion in 2021.
The spike in interest rates made venture a less attractive investment class for limited partners who fund the firms, so VCs largely managed their existing portfolios, coaching them to focus on revenue and control expenses.
However, next year could mark the return of mega-deals. A regulatory filing in November indicated Battelle spinout AmplifyBio had raised half of a $100 million target, but the round had not yet closed by year's end. Separately AmplifyBio had landed $50 million in non-dilutive debt financing early this year.
Columbus-based Drive Capital LLC, which was the first investor in Forge nearly four years ago, mad seed investments this year in companies that were based in or moving to Columbus: $5 million in the childcare staffing platform Tandem and leading a cumulative $3 million for Layer, which makes natural language AI "copilots" for working on software platforms like ZoomInfo.
Beam Benefits, another Drive portfolio company, had the region's fifth largest round of the year – at an increased valuation, contrary to the national trend of down rounds.
Massive rounds don't always lead to success: Columbus unicorn Olive AI Inc. was sold for parts and shuttered in October, returning nothing to Drive and other investors who had poured in more than $850 million over a decade, including three rounds greater than $100 million in 2020 and '21.
Columbus-area buyers and sellers
Besides the all-cash deal for Forge, Central Ohio acquisitions in the year include pharmacy startup GiftHealth, which sold a majority stake for $40 million. Sage Sustainable Electronics, which refurbishes and resells used tech devices from companies, sold a majority stake for a “substantial multimillion-dollar investment.”
Deals with undisclosed terms included Deep Lens, which makes AI software for matching patients to clinical trials; Bonzo Group, relationship-building software connecting loan officers and real estate agents; and Sophisticated Systems Inc., a more than 30-year-old Columbus IT services firm.
ReAlpha Tech Corp., the Dublin company that went public via direct listing, made two local acquisitions: fellow property tech company Rhove and IT firm United Software Group.
More tech companies in the region that were on the buying end of deals: Dublin's Strategic Systems Inc. acquired Cincinnati startup eLearningDoc; Centric Consulting acquired Mako Group; Irth Solutions acquired GeoAmps – both of them local software companies serving utilities, telecoms and the energy industry; custom software consultancy Test Double acquired Grandview Heights-based Pathfinder Product labs, securing its first physical office for the remote firm.
