The near future for venture capital funding looks cloudier amid the market's turmoil. But for Minnesota companies, the recent past was terrifc.
Health care startups in the region raised $475 million in the first quarter of 2022, more than all of 2021, according to a new venture report from the Medical Alley Association.
Twenty-nine health care-focused startups raised funds last quarter, with a majority coming from late-stage and growth rounds. Medical device companies led the way with $289 million in funding. They're trailed by digital health companies, which raised $153 million.
The largest round of the quarter came from medical device maker Saluda Medical, which raised $125 million in March.
Minneapolis-based Gravie was second with its $75 million Series E round in March.
The top five was rounded out by Nuvaira ($50 million); 4C Medical Technologies ($35.4 million) and Nice Healthcare ($30 million).
Medical Alley Vice President of Intelligence Frank Jaskulke, said the broad-based strength of the startup community was what impressed him most this quarter.
"You had the SPAC, big device companies, digital health, a bunch of little raises. It wasn't just device, or just digital," he said.
Following a record-breaking year in 2021, IPOs in the industry are slowing down.
Foxo Technologies Inc. (NYSE: FOXO) was the only company to go public last quarter. The Minneapolis-based life sciences company did so through a special purpose acquisition company (SPAC) which raised $224 million.
Jaskulke said IPOs happen when there's a market window to jump through.
"There was a very strong IPO window for most of last year, which gave a lot of companies that opportunity," he said. "The IPO window right now is a lot smaller. You'd have to be a larger, more developed company than last year."
However, Jaskulke said there's still enough private capital to keep the industry strong.
"That has very long timelines." he said. "Even if the economy is going up and down, they're looking 10 years, not one quarter."
Golden Valley-based Medical Alley Association is a nonprofit that supports Minnesota's health care economy through research and sponsoring events.
