As the world grapples with the economic impacts of the coronavirus pandemic, the venture ecosystem is likely to take a substantial hit in the coming months.
Here in Colorado, that hit is already being felt.
In Q1, Colorado startups raised a total of $306 million across 89 deals, according to the Venture Monitor Report by the National Venture Capital Association and PitchBook.
This marks a steep decline from the Q4 of 2019, which totaled $854 million from 110 deals. It is also lower than last year's Q1 total of $509 million from 104 deals.
This is the lowest total tracked by NVCA in Colorado since Q1 of 2018, which totaled just $294 million from 85 deals.
With the coronavirus pandemic in full swing, it seems entirely likely that Q2 will continue a trend of lower venture activity across the state.
"After 2019 posted another strong year for the US startup ecosystem, it was hard to imagine the industry would be facing a new period of transition as a result of a global pandemic within just three months of the new year," the report stated. "The topline numbers from the venture industry in Q1 2020 might not reflect a major disruption in the startup ecosystem, since the COVID-19 chaos came into full effect in March when venture deals were already in progress. However, the global pandemic is having a massive impact on startups and VC investors, just as with the rest of the US economy."
This mirrors the feeling we gathered from Colorado VCs on the outlook of venture activity in the state in a story last month. They expected deal flow to slow in the coming months, but hinted at a potential upswing for startups towards the end of the year.
The report shares a similar ray of hope for the outlook of the industry.
"Despite the rocky period ahead, there are a few bright spots for the industry. VC fundraising has been strong in recent years, with investors raising more than $210 billion since 2016. As a result, there is ample dry powder in the market ready to be put to work in promising startups. Also, down times have proven to be good times for startup investing, as companies born in an era of struggle tend to be more battle-hardened and capital efficient," it stated.
Despite the current economic conditions, venture activity hasn't stopped entirely. There is still money out there and deals to be made for promising startups.
Here are the top 10 Colorado funding deals from Q1:
1. Cerebral Therapeutics, $35M 2. Automox, $30M 3. MycoTechnology, $22M 4. Pax8, $21M 5. Friday Health Plans, $21M 6. Wurk, $19M 7. Front Range Biosciences, $19M 8. Eximis Surgical, $17M 9. QRails, $8M 10. STAQ Pharma, $6M
