Overall investments in Colorado startups declined during the third quarter, but local companies that managed to snag funding raised eye-popping sums, according to newly released data.
Colorado's deal count declined to 101, the fewest since the end of 2020. However, the overall funding amount remained high, with local startups bringing in $1.16 billion for the quarter, according to the most recent PitchBook-NVCA Venture Monitor report.
Statewide, the amount raised was 53% less than in the second quarter — when Colorado companies brought in $2 billion — but it's 28% more than was raised in the third quarter of 2021. Both deal counts and funding amounts in the state are outpacing pre-pandemic levels.
The state's biggest deals included $265 million for Denver-based upskilling leader Guild Education and $150 million for Boulder plant-based startup Meati Foods.
>> Click through the gallery to see Colorado's top venture capital deals in Q3
The Denver area was one of eight U.S. technology hubs that raised more than $1 billion for the quarter. The Bay Area, Los Angeles, New York, Boston, Seattle and Miami were the only other metro areas to raise more.
At the national level, the numbers looked less positive. VC investment totaled just $43 billion last quarter, the lowest point in more than two years. The 4,047 estimated deal count was down around 20% from the first quarter of 2022.
Pitchbook described the quarter as a "mixed picture" for the VC industry. Rising interest rates, fewer public listings and grim macroeconomic projections caused a drop from record-breaking VC activity during 2021 and early 2022, Pitchbook said. However, the quarter still fit into a "durable, positive trend" for the industry, according to the report.
"The VC slowdown narrative that has been pervasive in the market this year has finally materialized in the data, with nearly every metric aside from fundraising falling sharply in Q3," John Gabbert, founder and CEO of PitchBook, said in a statement. "The VC ecosystem, however, has shown remarkable resiliency in the face of continued economic headwinds, raising record levels of capital and closing an unexpectedly high number of deals."
A decline in VC activity this year mostly targeted investments in late-stage startup deals, but angel and seed-stage startups also last quarter. Pitchbook data show funding for early-stage startups declined by nearly $2 billion during the quarter.
While deal totals are declining, the amount of capital raised by U.S. startup investors, referred to as dry powder, has reached an all-time high.
Through just the first three quarters of 2022, dry powder raised by U.S. venture firms totaled $150 billion. That amount is already higher than the record-breaking total of $147 billion raised through the duration of 2021. Pitchbook said there's a surplus of about $290 billion collectively across venture firms in the country — more money than has ever been available in the venture ecosystem.
The huge surplus is a "testament to the strength of this asset class and its continued growth," the report states.
Together, ten venture firms based in Colorado raised a total of $716 million last quarter. The largest was a $150 million fund launched by Konvoy Ventures, a Denver-based firm that invests in the gaming industry.
Denver's Ibex Investors launched a $113 million fund. Hitting the $100 million mark were Boulder-based Markd VC and Greenwood Village-based 3Lines. Techstars in Boulder created a $81 million fund for its Advancing Cities Accelerator, which is being deployed to 60 early-stage startups through programs in Atlanta, Chicago, Detroit, Miami and Washington, D.C.
