Major venture capital deals were slow in the first six months of 2020, but the startup investment market has more than recovered with its strongest third quarter ever.
In the third quarter (July, August and September), 14 Minnesota startups raised $600 million in venture capital, according to the PricewaterhouseCoopers/CB Insights MoneyTree Report. That figure is the largest part of the $782 million local startups have raised through October, the report said.
But it's likely Minnesota's startups have raised even more than $600 million. The MoneyTree Report is usually more conservative in its venture capital estimates than are other organizations like Pitchbook or the Medical Alley Association. For example, it didn't include a $137 million round of funding that Eagan-based medtech startup Preventice Solutions raised in July, which would raise the state's total venture haul to $737 million.
2020's third quarter was the second-strongest quarter Minnesota has ever had and was only bested by 2019's fourth quarter, according to the MoneyTree report. Both quarters were buoyed by massive fundraising rounds from health insurance startup Bright Health; it raised $500 million in September and $635 million in 2019, which is believed to be Minnesota's largest ever.
Other standouts included CVRx, which is one of Minnesota's largest recipients of venture capital ever. The company, which makes a medical device that treats heart failure called the Barostim Neo, raised $50 million to help commercialize its device, which got FDA approval last year. CVRx has now raised about $390 million.
The fourth quarter, while not finished, is already coming together well for Minnesota and includes multiple rounds over $100 million. Cybersecurity company Arctic Wolf announced in October that it had raised a $200 million Series E at the same time it said it would be moving its corporate headquarters to Eden Prairie and hiring 150 employees in Minnesota by the end of 2021.
That same week, Minneapolis-based health insurance Bind Benefits Inc. announced it had raised a $105 million Series B. Plymouth-based medical device company Urotronic announced a $20 million Series C earlier in the month.
The top 10 venture capital raises in 2020's third quarter, according to the MoneyTree Report, the Medical Alley Association and Minne Inno's reporting are:
- Minneapolis-based health insurance company Bright Health raised $500 million in September;
- Eagan-based heart-monitoring device maker Preventice Solutions raised $137 million in July;
- Brooklyn Park-based heart failure device maker CVRx raised $50 million in July;
- Plymouth-based lung treatment device maker Nuvaira Inc. raised $17.42 million;
- Bloomington-based logistics startup Dispatch raised $11.15 million in July;
- Minneapolis-based brain surgery company Monteris Medical raised $9 million in September;
- Maple Grove-based prostate cancer treatment company Francis Medical raised $4 million in September;
- Minneapolis-based manufacturing software company Fulcrum raised $3.1 million in September;
- Minneapolis-based digital marketing and media startup Wisdom Gaming Group raised $3 million in September;
- Minneapolis-based financial tech startup ClickSWITCH raised $2 million in September.
