2023 was a reset for South Florida's venture capital ecosystem.
Technology startups in Miami-Dade, Broward and Palm Beach counties collectively raised $2.41 billion across 393 deals last year, according to eMerge Americas' new 2023 Insights report. That was about half of the $5.8 billion local companies raised in 2022, a record-breaking year for the region.
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Instead, last year venture capital investments returned to the pre-pandemic levels of 2019, when the region took in about $2 billion annually.
The VC decline was felt across the country. A combination of higher interest rates, international conflicts and increased business competition with China led to fewer deals last year as the number of active investors decreased, according to a recent PitchBook-NVCA Venture Monitor report.
However, eMerge notes the South Florida decline "was more extreme than the 30% experienced nationally."
South Florida is still the place to be if you're building a startup in the Sunshine State: Ventures based in the area secured 69% of the state's VC dollars and 59% of all deals. Locally, nearly three-quarters of all funded companies were based in Miami-Dade County, followed by Palm Beach (17%) and Broward (14%).
The venture capital funding gap between female and male-founded technology companies was still substantial in 2023, with startups led by all-women teams receiving just 2% of all Miami-area venture capital.
Top-funded tech verticals
Financial technology was the most active sector, securing about 24% of the venture capital invested in South Florida startups. Health technology was also popular, with businesses in that vertical receiving $362 million across 65 deals from VC investors. That's down from a high of $1.1 billion in 2021.
Climate technology was the rising star of 2023, eMerge reports. Those startups, developing solutions for everything from sea level rise to battery storage systems, secured $263 million across 31 deals last year. It was the only tech sector in the region that raised more VC dollars in 2023 than the year before.
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"Among tech sectors, we are witnessing the rise of climatetech/cleantech in a region that benefits from the solutions," the report said.
South Florida was named a climate resilience technology hub by the federal government last year, a designation that could unlock more funding to the region as well.
Trends to watch
The hype for cryptocurrency and web3 has died down, but there are still a handful of local companies building in that vertical. In 2023, crypto sector startups raised $245 million across 35 deals. Miami-based QuickNode, a blockchain infrastructure company, inked the biggest deal with a $60 million raise.
An industry-wide frenzy for artificial intelligence technology didn't escape South Florida. AI-powered startups building solutions for health tech, e-commerce and more raised $319 million in VC dollars over 56 deals. Cast AI, CarePredict and SellersFi were the top-funded businesses in that sector.
Top-funded startups
In South Florida, the companies that received the most VC funding in 2023 were:
- Hollywood-based Classwallet ($95 million)
- Weston-based Digibee ($60 million)
- Miami-based QuickNode ($60 million)
- Miami-based Cast AI ($55 million)
- Miami-based MaintainX ($50 million)
- Palm Beach-based Forward Therapeutics ($50 million)
- Miami-based Lula ($35 million)
- Miami-based Betr ($35 million)
- Miami-based Crisp ($35 million)
- Miami-based Space Eyes ($33.5 million)
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