After a record Q2, local venture capital investment figures corrected in dramatic fashion.
Metro Orlando companies collectively raised $22.6 million last quarter, down 92.9% from $320.7 million in Q2 and down 85.8% compared to $159.9 million in Q3 2021, according to data released by PitchBook and the National Venture Capital Association on Oct. 13. It was the lowest amount of money invested in local companies in any quarter since Q1 2020.
It was going to be tough for Orlando companies to eclipse the fundraising total of Q2, which was the best quarter for local startup investment activity since at least Q1 2014. Still, the steep drop-off in Q3 is indicative of a venture capital market that’s cooling across the U.S. after a record year.
Last year was a record one for U.S. venture investment, but economic headwinds this year have brought the industry back to earth. For example, venture money invested into companies hit a nine-quarter low in the U.S. in Q3, said Kyle Stanford, PitchBook’s lead VC analyst.
Startup investment was down on the Space Coast as well, where companies raised $5.2 million compared to $25.3 million the quarter before. However, Daytona Beach firms raised $14.1 million, up from $250,000 in Q2.
Still, the report by PitchBook and the National Venture Capital Association recorded several Central Florida investment deals worth more than $1 million:
- Finexio: The Orlando-based accounts payable software company raised $14 million in the initial close of its Series B round, the firm announced July 25. It was co-led by Mendon Venture Partners and National Bank Holdings Corporation.
- VerdeGo Aero: The Daytona Beach-based hybrid-electric aviation propulsion startup closed a $12 million Series A round, which it announced in July. The round was led by RTX Ventures, the venture capital arm of aerospace and defense giant Raytheon Technologies Corp.
- NeuTrace: The Longwood-based company developing innovative diagnostic solutions for heart disease raised $3 million in August, per PitchBook and the National Venture Capital Association.
- Kalogon: The Melbourne-based maker of a smart cushion in September raised nearly $2 million in a seed round led by local investment group SeedfundersOrlando.
- Chrp Technologies: Orlando-based insurance tech company Chrp in September announced a seed round thanks to a group of angel investors primarily based in Florida. Chrp did not disclose how much it raised, but SEC documents show it brought in at least $2.3 million.
Venture capital activity is important because it funds companies as they scale up while also providing business expertise and industry connections through investors. That often means the creation of high-wage jobs and the development of more innovative products and solutions.
For example, VerdeGo Aero expects to nearly double its workforce of 20 people with the addition of 15 jobs by early next year. Those jobs will include technical and commercial roles, CEO Eric Bartsch previously told Orlando Inno.
While venture capital activity was muted last quarter compared to the past year, deals by no means have dried up. In fact, more money has been invested in U.S. companies so far this year ($194.9 billion) than any of the last 15 years, with the exception of 2021 ($343.6 billion).
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