Venture capital investment slows in Wisconsin in first quarter

Venture capital activity slowed in Wisconsin in the first quarter of 2024 with markedly fewer deals getting done.

Wisconsin startups raised $107.4 million through 19 deals in the first quarter, according to the latest quarterly report from PitchBook Data Inc. and the National Venture Capital Association. That compares with $116.4 million across 33 deals completed in the first quarter of 2023. Figures from 2023 represent adjusted totals.

Nationally, the $36.6 billion invested in startups across 3,925 deals in the first quarter reflects a similar pace as last year, according to the report.

"This year began on the same note that 2023 ended," said NVCA President and CEO Bobby Franklin. "Dealmaking and exits are softer and slower than we’d typically like, but there is an abundance of dry powder and optimism in various sectors, including AI, that signal room for growth in the year ahead."

Franklin estimates the venture capital sector has well over $300 billion in dry powder, a reference to unspent cash reserves awaiting investment. Such high levels contrast sharply, he said, with the lack of investment in the first quarter reflecting a "defensive investment climate."

In other words, the relatively low levels of investment reflect the reduction in investor activity, not a reduction in demand for capital, according to Franklin. He notes that pre-seed and seed rounds are at their lowest levels in 10 years while later stage rounds are up.

"Investors seem to be circling their wagons and making sure their most promising companies are positioned for success before they make new bets," Franklin said.

Here's a look at the Wisconsin startups that raised the most VC funding in the first quarter of 2024.

1. Elephas

2. Synthetaic

3. Zizzl Health

4. Sprocket Security

5. Midwest Games