St. Louis startups began 2022 on a high note, raising more than $150 million in investment in the first quarter.
A new report published Thursday by PitchBook and the National Venture Capital Association tracked 12 St. Louis startup deals totaling $156.3 million for the quarter ended March 31. The amount of capital is down from third and fourth quarter totals, which were $308.5 million and 335.9 million, respectively. But the $156.3 million raised by St. Louis startups marks the largest total locally in the opening quarter of a year dating back to 2014. St. Louis startups raised $64.3 million in the first quarter of 2021 and $86.2 million to start off 2020.
The bulk of the local fundraising dollars included in the first quarter tally went to St. Louis senior health startup EmpowerMe Wellness, which in January announced it had raised more than $100 million from investors. Other significant deals in the first quarter include the closing of a $38 million Series C funding round for artificial intelligence software startup Capacity and a $6 million Series A financing for pet supplement company Native Pet.
Nationally, the dollar amount of startup funding in the first quarter of 2022 was down from the year-ago period, with PitchBook saying the market is “showing signs of a VC ecosystem slowdown that many have expected.” Overall, startups in the U.S. raised $70.7 billion in the first quarter, down from $95.4 billion in the last quarter of 2022.
“Even though Q1 deal value was off pace from every quarter in 2021, Q1 2022 still exceeded pre-2021 quarterly totals. VC deal activity will likely see a delayed reaction to the public market slowdown, a trend to watch closely in Q2. Some investors have started to see initial downward corrections in VC market pricing, valuation, and the speed at which deals are closing,” Pitchbook’s report said.
The amount of funding funneled to startups wasn’t the only major venture capital metric to experience a significant drop in the first quarter of 2022. The number of startup exits also saw a reduction.
“In stark contrast to the flurry of public listing activity in 2021, IPOs and exits of VC-backed startups came to a near complete halt during the first three months of the year with only $33.6 billion in exit value posted after three consecutive quarters over $192.0 billion. It is evident that the uncertainty felt in the broader markets has affected venture liquidity markets more rapidly compared with dealmaking figures,” Pitchbook said.
In St. Louis, there were no exits in the first quarter, according to PitchBook’s data. St. Louis firms recorded nine exits in 2021, per the data.
