Approximately 10 Minnesota startups raised around $40 million in venture capital during the first quarter of 2019, according to PwC's MoneyTree report.
This is the slowest first quarter, both in the number of deals and amount of capital, for Minnesota startups in the last five years.
However, Minnesota isn't alone. U.S. venture capital funding fell nationally in Q1 2019, according to PwC, by 36 percent to $25 billion. Around $75 million of that was invested in Minnesota's region, the North Central Midwest. Overall, Q1 2019 saw 4 percent fewer deals compared to Q4 2018, which closed at a near-record $39 billion.
Seed-stage deals also fell in the first quarter, the report states. These have been declining since Q3 2017, when seed fundings represented 36 percent of all deals. That number now stands at 24 percent.
It's worth noting that PitchBook published a similar report with a very different take on Q1. By quarter's end, PitchBook reports, investors deployed $32.6 billion in VC funding across 1,853 deals. This is a 10.5 percent increase in volume and a 22.5 percent decrease in count compared to Q1 2018.
PitchBook and PwC have different processes for collecting data. PwC's MoneyTree report only counts actual dollars awarded during the quarter, not funding promised but yet to be paid out. Meanwhile, the PitchBook team scrubs the internet for data coverage and startup happenings.
Of course, it's still too early to tell if the rest of the year's deal flow will stay slow. Last year began in a similar fashion, but by the end of 2018, startups across the country (including Minnesota) raised a record amount of venture capital, according to Pitchbook.
Read Minne Inno’s past monthly funding roundups here.
Here are the four largest venture capital raises in the first quarter of 2019, according to PwC's MoneyTree report:
StemoniX
StemoniX, a biotech startup using stem cells to create micro-organs for drug testing and development, raised $14.4 million in a fresh round of funding. Minneapolis-based Brightstone Venture Capital led StemoniX’s round of funding, and was joined by several of the company’s initial investors, including San Diego-based Crescent Ridge Partners and SEED San Diego. The Series B round of funding also brought on new investors, including Alumni Ventures, Group Keshif Ventures and Mayo Clinic.
Monteris Medical
Monteris Medical, which makes laser technology that destroys tumors has secured $10.7 million in a planned $17 million equity financing round. Monteris’ main business is its NeuroBlate system, which physicians use to target brain tumors. Approved by the FDA since 2013, the procedure involves using imaging technology to precisely guide a probe into a patient’s brain. The company completed its last round of funding in June in 2017, when it closed on $27 million in equity financing.
Apruve
Apruve, a Minneapolis-based financial-technology startup that makes software for B2B credit management, closed on $6 million in funding to grow its team. The round was led by San Francisco-based Cloud Apps Capital Partners. TTV Capital and Allegis Capital, who previously invested in Apruve, also participated.
Flywheel Exchange
Flywheel Exchange, a medical-technology startup creating a data-management platform powered by artificial intelligence, has closed on $6 million in an oversubscribed Series A round, according to an SEC filing. Flywheel President and Chief Operating Officer James Olson told Minne Inno that the company plans to use the new capital to increase its sales and marketing efforts. Flywheel also hopes to expand outside of the research industry, where it does the bulk of its business, and move into the hospital and pharmaceutical markets.
