Two Orlando companies combined to raise more venture capital in May than all Central Florida startups raised in the first quarter combined, thanks to out-of-state investment firms.
Boston-based Elephant led a $20 million round for Maitland-based cybersecurity company ThreatLocker Inc., and Santa Clara, California-based Intel Corp.'s Intel Capital co-led a $23 million round for Orlando-based autonomous shuttle firm Beep Inc.
These deals and other local startup investments are proof Central Florida increasingly is catching the attention of investors in venture capital hubs outside the Sunshine State, Ben Patz, managing partner of Orlando-based venture capital firm DeepWork Capital LLC, told Orlando Business Journal. “It’s absolutely becoming more appealing.”
Venture capital can be crucial for local startups and early-stage companies. It funds companies as they scale up while also providing business expertise and industry connections.
Orlando startups 'step up their game'
There are a couple of reasons out-of-state investors now take closer looks at Central Florida firms, Patz said.
One reason is the growing number of impressive, investable companies. If a Florida startup is comparable to a startup in a tech hub like Boston, investors may choose the Florida company because they can execute a more cost-effective deal, he said. “Companies have stepped up their game in what they’re offering.”
Another reason is the Covid-19 pandemic forced venture capital firms to meet with founders and scout for investment deals virtually. This exposed investors to companies spread across a broader geographic range. For example, Patz said DeepWork in the past year reviewed twice the number of deals outside the Sunshine State as it otherwise would have. At the same time, DeepWork got more interest in its portfolio companies from venture capital firms based in California and Massachusetts.
“When you had to do your deals virtually," said Patz, "it made no difference if you looked in your backyard or around the world.”
Other local tech investors see rising interest in Central Florida from across the U.S. Orlando-companies face an easier time raising money from investors outside Florida, but local investment dollars are still hard to come by, Terrance Berland, managing partner of Orlando-based Kirenaga Partners LLC, previously told OBJ. “People are starting to realize you can have unicorns in Florida.”
Growth for local firms
Meanwhile, the investment deals fund new jobs and expansion at ThreatLocker and Beep.
In fact, ThreatLocker plans to grow from more than 50 employees to at least 200 by October 2022, CEO Danny Jenkins previously told OBJ. Elephant, which previously invested in Clearwater-based cybersecurity company KnowBe4 Inc. before it went public, was drawn to ThreatLocker’s “unique approach” to endpoint security, Partner Jeremiah Daly said in a prepared statement.
“This round is a testament to ThreatLocker’s differentiated technology and the team’s ability to execute and gain notable market share in only a short period of time."
In addition, Beep’s investment deal with the venture capital arm of tech giant Intel (NYSE: INTC) will fund the company as it rolls out a new self-driving shuttle route in Yellowstone National Park and plans additional services in Georgia and Texas. The company, headquartered in Orlando's popular Lake Nona community, will grow from more than 70 employees to 100 by early 2022, CEO Joe Moye previously told OBJ.
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