The amount of venture capital funding snagged by St. Louis startups dropped off considerably in 2022, mirroring a nationwide decrease that comes after companies raised a record total in the prior year.
St. Louis startups raised $363.8 million in venture financing in 2022, according to a report published Thursday by research firm PitchBook and the National Venture Capital Association. That’s down from $802.6 million raised by St. Louis firms in 2021, according to Pitchbook.
The amount of capital wasn’t the only statistic that declined locally. Deal flow also was down, with 54 funding deals tracked in 2022, off from 75 deals in 2021.
St. Louis’ 2022 aligns with national trends, with the amount of capital snagged by startups nationwide dropping for four consecutive quarters. In the quarter ended Dec. 31, startups closed 2,935 funding deals totaling $36.2 billion, down from $46.8 billion and 3,605 deals in the prior quarter. For the full year, startups raised $238.3 billion across 15,852 deals, down from $344.7 billion and 18,521 deals in 2021.
“In raw numbers, 2022 was a great year for the VC industry, with most indicators of market activity at or near record highs. When graded against any year other than the stratospheric 2021, industry activity was extremely strong. However, it is important to look at the quarterly trend, where activity dropped off steeply between the first and last quarters of 2022,” Pitchbook’s report said.
Companies in St. Louis closed out 2022 raising $43.6 million across 13 deals in the fourth quarter, the lowest quarterly dollar figure locally since the second quarter of 2019 when local companies raised $37.9 million.
Despite the steep drop in fundraising, there were still several notable venture deals in 2022 for St. Louis startups. In January, senior living startup EmpowerMe Wellness announced it has raised more than $100 million from investors, with it using the capital to pursue rapid growth. Other major funding rounds for St. Louis startups in 2022 included a $38 million Series C financing for software startup Capacity; a $26 million Series C-1 funding round for agtech firm CoverCress, which in August saw a majority stake acquired by Bayer AG; $21 million in Series B financing for cancer drug startup Immunophotonics; and a $17 million Series A funding round for senior caregiving startup TCARE.
In its report, Pitchbook said 2023 will be a key year to determining the outlook of venture financing
“The question is, was the decrease in activity during 2022 just the afterparty effect of 2021 wearing off? Or is the VC industry just taking a moment to regroup,” the report said.
