Wisconsin startups raised over $640 million in angel and venture capital funding in 2022, 26% lower than the prior year's record-breaking total, but still the second-highest level of investment on record.
According to the Wisconsin Technology Council's Wisconsin Portfolio, venture capital funding dropped from $868.8 million in 2021.
The Wisconsin Technology Council and its investor arm, the Tech Council Investor Networks, are responsible for compiling research on early stage investment data into the yearly Wisconsin Portfolio report. Data are collected via public reports, databases, press releases, company websites, investor surveys and direct clarification from investors.
“Following the boom-year of 2021, we were not sure how investors would react, especially with the uncertainty being caused by inflation and the Federal Reserve’s response,” said Joe Kremer, director of the Tech Council Investor Networks, in a news release. "But most trend lines remain on a steady upward climb. It is worth highlighting that half of the raises were less than $1 million, which signals small investors are staying active in the market.”
According to the release on the findings, 107 Wisconsin-based startups received funding from 116 funds, networks and other investment sources in 2022. Of these 116, about 76 were from out-of-state sources of investment.
The top-earning company was Fetch Rewards, which earned $240 million. The top 10 deals accounted for approximately 75% of total investments. Other high-ranking companies include SHINE Medical Technologies, Elephas Biosciences, Moxie Health, EnsoData, Polco, Frontdesk, Synthetaic, Understory and Leo Cancer Care.
Of all 107 companies, only 35% of them represented startups receiving funding for the first time. This decline in first-time funding is on trend.
Earlier this year, Pitchbook, a firm that also tracks investments, put the 2022 Wisconsin total much lower at $526 million, down from $592 million in 2021. Pitchbook also noted that Wisconsin is down compared with other states in the Midwest such as Illinois, Minnesota, Ohio, Michigan and Indiana.
The national trend is that of decline. Of the states that received at least $1 billion in startup investment, only five saw percent gains from 2021 to 2022, according to Pitchbook's numbers. These include Illinois, Michigan, North Carolina, Florida and Virginia. New York, California and Massachusetts, known to generate massive investment, were down significantly in 2022.
Other trends observed by Wisconsin Portfolio demonstrate that while Madison represents fewer of the companies that received investment in 2022, southeast Wisconsin is up in terms of startup representation. Health care and information technology startups stole the show, taking 94% of the statewide investments. This is up from 87% in 2021.
“Wisconsin continues to attract more angel and venture capital, including a rising share of money from outside the state, but more work must be done to recognize the state’s full potential,” said Tech Council president Tom Still in the release.
The Wisconsin Technology Council is an independent, nonprofit that acts as the science and technology adviser to the governor and Legislature. Apart from its policy guidance role, the Tech Council also acts to spur innovation, entrepreneurship and economic growth through its Innovation Network, the Wisconsin Entrepreneurs' Conference and other similar arms and initiatives.
