North Texas startups raised more than $753 million across 148 venture capital deals last year, according to a report by PitchBook and the National Venture Capital Association that includes data from the fourth quarter of 2019.
The first quarter showed the largest amount of funding with more than $291 million across 47 deals. While the third quarter showed signs of slowing with nearly $85 million over 27 deals. Overall, there was an upward trend from 2018, which saw about $559 million with 111 deals.
“I think as Dallas has become more of an interest as the coastal opportunities become more and more overpriced,” Cindy Revol, principal at Perot Jain, told NTX Inno. “My perception in this region is that the early stage activity has always been fairly good and has definitely picked up.”
The trends in North Texas track with the rest of the state, with Austin and the Houston region both posting more funding and deal counts than in 2018.
Here were the top DFW area funding rounds logged in the PitchBook-NVCA report.
Theatro - $20 million Renibus Therapeutics - $16 million Actuate Therapeutics - $10 million Access Physicians - $9 million Mooala - $8 million CerSci - $8 million OneDay - $8 million EMCO Oilfield Services - $7 million Razberi Technologies - $6 million Traxo - $5 million
While not listed in the PitchBook-NVCA report, the Metroplex also saw a number of notable exits, including Plano-based specialty coffee maker NuZee’s $12 million IPO in November.
Revol said North Texas presents an opportunity to startups in that there are a number of large corporations and established industries in the region that are looking for innovation. She noted that the B2B, mobility and supply chain logistics are attractive industries in DFW, with advanced computing, SaaS and healthcare set to be large players in the future.
“I think it’s kind of recognized what our assets are and what we bring to the table,” Revol said.
Tracking venture capital deals and exits, due to the differences in the way they are reported, and data is collected, can be difficult. This accounts for the variations in data and analysis from one report to another.
National Stats
Overall, 2019 set new records for venture capital deals. Across the U.S., there was about $136.5 billion raised across 10,777 deals – the second highest total in the past decade since 2018. Venture funds raising in the country, though down from last year, were still at high levels with firms raising $45.1 billion across 258 vehicles. The report attributes this strong activity to an increase in mega-deals, a rise in early-stage deals, as well as increasing maturity in startup companies.
Exits across the country set record highs, with a VC exit value of more than $256 billion over 882 liquidity events.
Another notable trend in the national data was an increase in investments in female-founded companies, which set record highs in 2019 and saw more than $18 billion raised over more than 2,000 deals.
The report notes that 2019 likely represents the trend that high funding and exits are likely the new normal. And that as nontraditional investors continue participating in venture capital activity, 2020 is likely to be able to sustain those numbers.
Revol said the increase in family offices investing in venture deals is an increasing trend in DFW, adding that as younger generations begin to take control, investing in different spheres could become more common.
However, the PitchBook report does caution that a number of poor performing IPOs and uncertainty in global macroeconomic trends could have a slowdown effect on performance in the coming year.
“I think Dallas represents an awesome opportunity. there’s so many corporations here looking for new ideas and new innovation,” Revol said. “People have been raising funds and there’s tons of money that’s dedicated to this asset class that they have to put to work, so I think you’re still going to have a lot of money chasing deals, I think that’s going to lift valuations.”
