Venture capital investors are directing fewer dollars to South Florida.
Startups located in Miami-Dade, Broward and Palm Beach counties raised $360 million in venture capital over 71 deals during the second quarter of 2024, according to the Q2 2024 Pitchbook-NVCA Venture Monitor Report. That's down about 40% from the first quarter of the year.
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Nationally, investors have pulled back after unprecedented levels of investment in blockchain, virtual reality and other early-stage technologies during the Covid-19 pandemic.
"Now investors are focused on supporting their most promising companies to maturity amid a historically challenging exit environment," said Bobby Franklin, president and CEO of NVCA, a trade association for the venture community.
Miami emerged as a hotspot for technology startup investors during the pandemic, when founders and investors flocked to South Florida. Local startups secured more than $5 billion from investors in 2022, a record-breaking year for region. That fell to $2 billion in 2023.
According to Pitchbook data, the top local funding deals in Q2 were:
- Majority: The Miami fintech, which provides mobile banking services to immigrants, raised $67.3 million in a late-stage funding round.
- Fundkite: The fintech for small business funding secured $26 million in funding.
- Healing Realty Trust: The Boca Raton business, the owner of health care related real estate assets, raised $25 million.
- Payabli: Based in Miami, the payments infrastructure firm secured $20 million in series A funding.
- Exowatt: The Miami clean technology company raised $20 million in a funding round backed by A16Z, Atomic and OpenAI co-founder Sam Altman.
So far, South Florida startups have raised about $984 million over 176 deals in 2024.
Nationally, U.S. startups raised $55.6 billion over 4,226 deals from venture capital investors in the second quarter. The San Francisco Bay Area ($18.7 billion raised over 633 deals) and New York City ($16.6 billion over 468 deals) accounted for the bulk of that activity, followed by Boston ($3.7 billion over 209 deals), Los Angeles ($2.5 billion over 209 deals) and Denver ($1 billion over 83 deals).
Read more: Despite VC funding drop, Miami's startup ecosystem has 'staying power'
While many AI startups attracted a frenzy of funding over the last year, some analysts report that hype may have led to some risky investments.
"Some would argue this is a bright spot for dealmaking, but we're seeing glimpses of low-diligence deals getting done that might pose risks to fund returns down the road," said Nizar Tarhuni, vice president of institutional research and editorial at PitchBook. "Given the factors at play, this market will likely continue to be challenging for VC fundraising, and, in turn, startups looking to raise capital."
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