The $14 million raised by Jacksonville-based Paywallet was the largest investment made on the First Coast in the first quarter of 2022, according to data from PitchBook and the National Venture Capital Association
The investment came after the region — along with the rest of the country — set records in Q1 2021, with more than $166 million invested in the Jacksonville area. Investment has since cooled considerably, although Q1 2022 had triple the level of investment as Q4 2021, according to the Pitchbook report.
Paywallet, a payroll-linked verification and remittance ecosystem, closed an $8.82 million Series A funding round in February that was led by new investor Pasaca Capital Inc., a private equity investment firm based in Pasadena, California.
PruVista Capital LLC, a Jacksonville-based specialty finance investment company, and Arcadia Funds LLC, a Burlington, Massachusetts-based fintech-focused investment manager, had previously invested and also participated in the funding round.
The other large fundings in the region include Shepard's Finance, which is involved in real estate financing; Urban SDK, which aggregates and analyzes public data; and group messaging company Relevnt. Each of the startups raised $5 million.
Across the state, Pitchbook estimates startups raised $1.54 billion during the quarter — a near record, only losing out it Q4 2021 at $2.5 billion. The past two years' worth of investments have dwarfed any other time period PitchBook has monitored the scene by a 5:1 margin.
Nationally, the story was similar, with VC deals largely keeping pace with recent quarters. In Q1, $70.7 billion was invested across 3,723 deals. While that’s one of the highest quarters on record, the total value of those deals fells 35% from the final quarter of 2021.
“Mega-deals,” meaning those of $100 million or more, fell to just 185 in the first quarter, bringing in $36.6 billion in capital. That’s suggests a stark slowdown from 2021, when there were 845 mega-deals across the whole year that brought in a total of $845 billion for these typically later-stage companies.
The first quarter of 2022 had an “eerie lack of IPOs or large exits,” the report said, with only 28 public listings in the first quarter, down significantly from 74 in the final quarter of 2021. The volatility in the public markets has created a wait-and-see period for companies looking to go public.
“The start of 2022 has shown signs of an expected adjustment for the VC industry on the heels of a two-year period where VC-backed startups served as the backbone of the U.S. economy during the global pandemic,” said NVCA President and CEO Bobby Franklin in the report. When and how that slowdown will end “remains to be seen,” he added.
