If it seemed like August brought a lot of funding news, it's because it did. The month garnered $33.92 million for funding startups, according to the the U.S. Security and Exchange Commission site.
That's up from the $6.5M raised in August 2018, and startup investors believe this trajectory will keep going upward.
"It hasn't been as surprising to me because we've really been seeing some serious growth in how many companies have been popping up in the state of Florida," Saxon Baum, a partner in startup investor Florida Funders, said. "We’re seeing more companies, we’re seeing better companies, so when that happens, you will see more capital flowing into it. It's the perfect storm of capital, talent and growth."
Jim Barnish, a partner with Morgan Hill Partners, said the amount of money raised in August was less surprising than the number of actual deals done, which totaled six for Tampa Bay technology companies alone.
"Overall the trend of things has been on an upswing," he said. "There’s more money from a capital perspective being put to work every quarter, but the number of deals has surpassed my expectations this past quarter. With this earlier stage funding with seed A or early B, you are getting a lot of people moving up the market. You're doing bigger deals because the risk of doing earlier stage is more rewarding than ever."
However, both men acknowledged the potential stumbling block of trying to raise funding for a Series B round not only in Tampa Bay but for startups in general.
"The organizations like Seed Funders and Florida Funders — I think that's helping to tell the story of early stage deals," Barnish said. "But for the financiers or investors in the Series B-led world is still a little bit of a gap for us. We still have a few players, but there's not a lot of people telling stories between series A and B."
But their optimism differed for how the rest of 2019 will look: while Barnish believes there will be a "significant" slowdown once October hits through roughly January, Baum thinks the deals will continue to rise.
"I think there has been a slow down in mid-market private equity, but I don't think there will be slow down in venture capital funding," Baum said. "We’re literally at the tip of the iceberg. So many are moving here, keeping companies here, bringing companies. The success of the ecosystem overall has continued to pump this market and I don't see it slowing down."
Let's dive in to the full list of startups and even some community organizations, that received funding in August.
• The month kicked off with Pinellas County receiving a $7.5 million federal Economic Development Administration grant to build a new Tampa Bay Innovation Center. The grant stemmed from a $600 million investment to the Economic Adjustment Assistance Program for hurricanes Irma, Maria, Harvey and other natural disasters in 2017. There are plans to match the $7.5 million with an additional $4.5 million in local funds.
“This investment will foster a long-term, growth-centered environment in St. Petersburg for small businesses to create new solutions and train a qualified workforce with the skills they need to pursue dignified work,” Sen. Marco Rubio said in a statement.
The 45K sq. ft. space will be in downtown St. Pete, at the southwest corner of 11th Avenue S and Fourth Street S in St. Petersburg’s Innovation District.
• Digital Hands, a cybersecurity company that prevents, detects and responds to cybersecurity threats, received a $15 million investment in a round led by Atlanta-based VC firm Fulcrum Equity Partners, according to an SEC filing.
• Froogal, a Tampa-based fintech startup, received a 6% equity investment from the Queen City Fintech Accelerator. While CEO Kale Pasch could not disclose the monetary amount, he said the 6% is typical for each company entering into the Queen City accelerator.
Froogal had plans to launch its beta phase at the end of August with a full launch likely in November, after it is finished with the accelerator.
• Tampa tech company Lumina, which uses artificial intelligence for predictive analytics and risk sensing, raised $1.4 million in equity from 12 investors, according to SEC reports. This follows the $5 million the company raised in equity in July.
• SoleVentures, an app that connects self-employed professionals, raised $900,000. According to SEC reports, the funding comes from one investor and helps the St. Petersburg-based SoleVentues inch toward its ultimate $2 million debt funding goal.
• The University of South Florida College of Pharmacy will be moving into the Morsani College of Medicine thanks to a $10 million gift. The new space will also come with some state-of-the-art perks like virtual and augmented reality, according to Charles Lockwood, dean at the Morsani College of Medicine.
The College of Pharmacy will take up two floors in the downtown building and also have office spaces and a pharmacy simulation center. Officials still need roughly $10 million more in funding to complete the project.
• Tampa-based Homee, an app that provides on-demand home repair services, has raised $30 million thanks to the latest closed funding round.
The Series B financing round was led by Liberty Mutual Strategic Ventures, with existing investors Activate Capital Partners, Florida Funders, Deepwork Capital, and Engage returning for the second round of the company’s financing. The Hartford, State Farm Ventures and Ferguson Ventures were new investors that also joined in for the $15 million total.
• Florida Funders (the crowdsourcing investor group focused on early-stage tech startups) announced it’s investing $1.27 million in 2ULaundry. The Charlotte, N.C.-based company with a focus on valet dry cleaning and laundry will now be expanding to Florida with the help of the investment.
“The south has not been regarded as one of the startup meccas of the country, especially when it comes to B2C businesses,” Alexander Smereczniak, co-founder and CEO for 2ULaundry said in a statement. “For a tech-enabled laundry business to have raised a $6M series A, led by a Florida-based fund, it is a testament that these markets increasingly want to see more companies like ours built here and relocated here.”
