Sacramento-area technology companies reeled in more than $160 million in reported venture capital and private equity investments in 2022.
It’s a dramatic decline from the record-shattering pace set in 2021, when local companies raised more than $315 million in the fourth quarter of that year alone.
It appears 2022 got back to normal levels following the record of 2021, which saw high funding levels locally, domestically and internationally.
In the five quarters ended December 2021, Sacramento companies had raised nearly $2 billion. The local fundings totaled $1.6 billion in the four quarters ended Sept. 30, 2021, and then the fourth quarter of 2021 saw more than $315 million flow into local companies from private equity and venture capital investors.
But 2022 saw funding grind to a halt internationally as what was thought to be “transitory” inflation started looking more like just outright inflation, and that signaled that interest rates would start to climb, which slows the economy.
Still, some area companies found a way to raise money. Here are the top fundings reported this year for technology-related companies in the region. The local funding could be much higher, because the two largest investments didn't disclose exactly how much they raised.
Quest Technology Management
Amount: Not disclosed
From: BBH Capital Partners of New York
Notable: The private equity investment will be used to expand Quest’s team and grow the Roseville company, which offers outsourced technology management, support and cybersecurity. The companies did not release the value of the investment, but BBH invested through two of its funds, which tend to make investments north of $40 million. BBH is currently investing through BBH Capital Partners VI LP and CP Opportunities Fund LP. The first fund makes investments between $40 million and $150 million, and the second fund makes investments up to $30 million.
Webconnex
Amount: Not disclosed
From: New York private equity firm GreyLion Capital
Notable: GreyLion’s website says it targets “equity investments between $25 million and $125 million.” Founded in 2008, Webconnex is a Sacramento software company that enables people to accept payments over the internet for ticketing, fundraising and event registration. The company says that it's processed more than $3 billion in payments, and at the time of the investment it was on track to process about $1 billion annually.
Aro Homes
Amount: $21 million
From: The funding was led by former Google CEO Eric Schmidt’s venture capital fund, Innovation Endeavors.
Notable: Factory-built, carbon-negative homebuilder Aro Homes came out of stealth mode in November. Aro’s factory is in Sacramento near McClellan Park. The company is based in Mountain View. Aro Homes developed and owns the construction process end to end, fulfilling the roles of developer, architect, engineer, general contractor and real estate agent.
InnerPlant
Amount: $16 million
From: Farm equipment giant John Deere led the funding round.
Notable: Davis-based InnerPlant has developed technology that allows plants to signal farmers optically about their condition. InnerPlant strains visually signal farmers when the plants need water, nutrients or protection from pests, by using filters coupled with satellite or drone images to show problems quickly in the field.
GeminiBio
Amount: $15 million in debt and other financing
Notable: GeminiBio raised the money to fund the expansion of its growing manufacturing and warehouse operations in West Sacramento. The company manufactures cell culture media, growth factors and custom media and bioprocess liquids for the cell and gene therapy market in clean room conditions. GeminiBio is expanding its operations in two locations in West Sacramento as the company branches out from making products for research applications to also making products for commercial applications.
Azra Games
Amount: $15 million
From: The funding was led by two funds of Menlo Park-based Andreessen Horowitz, one of the largest venture capital firms in the world.
Notable: Azra is a Sacramento blockchain gaming startup that's developing online role-playing games where players own their characters and can earn tokens as they play. "CEO Mark Otero is a seasoned game director who was at the forefront of mobile free-to-play games with the hit franchise 'Star Wars: Galaxy of Heroes,'” said Jonathan Lai, general partner of Andreessen Horowitz.
BCD Bioscience Inc.
Amount: $11.6 million
From: Not disclosed
Notable: The biotechnology startup was founded by professors at the University of California Davis. The new funding followed $4.8 million Davis-based BCD Bioscience raised at the end of 2020. The company has developed proprietary techniques to transform food-grade substances into products at the cellular level which may have nutritional and immune benefits.
NuCicer Inc.
Amount: $11 million this year
From: Leaps by Bayer led a $7 million funding round into NuCicer. The debt and equity investment led by Bayer followed on a $4 million seed round of funding that closed in March led by New York-based venture capital firm Lever VC.
Notable: Davis-based NuCicer is a food technology company that has developed chickpeas with 75% more protein than the standard commercially cultivated legumes. The second-stage seed round of funding will help the company bring its chickpea products to market in 2023, said co-founder and CEO Kathryn Cook. Leaps by Bayer is the impact investing arm of German chemical and agricultural giant Bayer AG.
App Orchid Inc.
Amount: $7.5 million credit facility
From: Toronto-based venture debt company Espresso Capital
Notable: App Orchid was founded in 2013 in San Ramon. The advanced business app company is backed by locally based Moneta Ventures. App Orchid will use the money to continue growing its platform that uses artificial intelligence and machine learning to quickly build apps for enterprise energy and utility customers like BP PLC (NYSE: BP) and Fujitsu. The App Orchid platform provides customers a combination of artificial intelligence and machine learning capabilities paired with industry specific-content that allows companies to build applications in weeks rather than months with little or no coding, the company said.
Acorn Finance
Amount: $8.4 million
From: The funding round was led by Boston-based MassMutual Ventures, a new investor.
Notable: The Acorn app allows contractors to make more money by getting nearly instant financing for home improvement loans. CEO and founder Giri Addanki said the new money will be used to make it easier and faster to onboard new lenders to the platform, a process that can take a couple of months. He wants to cut that in half. He also plans to cut the time it takes to onboard contractors from two weeks to one week. And the Sacramento company will upgrade its algorithms to filter out the best lender fit for the consumer and loan size.
Botanical Solution Inc.
Amount: $6.1 million
From: This funding round was led by Palo Alto-based private equity firm Otter Capital LLC.
Notable: Davis-based Botanical Solution raised the funding to expand its development of agricultural and pharmaceutical compounds derived from plants. Botanical Solution grows plant material indoors in stacked racks in controlled conditions.
