South Florida technology startups and later stage companies raised $690 million during the first half of 2020, with health care-related companies responsible for nearly 40% of those deals.
Those funds were spread across 75 deals, according to eMerge America's 2020 Global Pandemic Special Report. Plantation-based Magic Leap received almost half of the region's investment dollars after completing a $350 million fundraising round in the first quarter.
Total investments fell compared to the first half of 2019, when 79 companies raised $1.7 billion.
That's likely due to the Covid-19 pandemic, eMerge reports. While nearly half of the funding rounds completed before July were angel or seed-stage deals, first-time fundraising rounds for early stage companies were down compared to 2019.
"Perhaps because of the pandemic crisis, [early investments] fell back," the report said. "It’s a trend we saw nationally also, with first-time financings and completed seed stage deals down significantly in the first half [of 2020]."
Later-stage investments (Series B or higher), led by Magic Leap, comprised 32% of the deals in the first part of the year, up from 21.5% in all of 2019.
Twenty-eight healthcare-related companies – including Dania Beach-based Orthosensor and West Palm Beach-based Exuma Biotech – were funded in the first half of 2020, the most of any sector. According to the report, 10 of those companies are health tech ventures, eight are medical device companies, seven are biotech or pharmaceutical firms, and three were in other health care-related services.
Nationwide, the California Bay Area, New York and Boston metros received 67% of U.S. venture capital dollars in the first half of 2020. The San Francisco-Silicon Valley area led the country, with $31.3 billion in investment dollars across 1,109 deals.
South Florida ranked No. 11 among U.S. metros, behind Atlanta. Miami-Dade, Broward and Palm Beach counties snagged 75% of the state's total venture capital dollars ($916 million) and 56% of all deals completed during the period analyzed.
Other takeaways from the report:
- Exit activity slowed: There were no exits tracked in South Florida area or the state of Florida in the second quarter of 2020, according to the report. There were just three exits tracked in the state in the first quarter, led by CareCloud’s $32 million sale.
- Fintech in higher demand: The first half of 2020 saw 17 local fintech deals, up from 12 in all of 2019. That pace was expected to continue in 2020 and into 2021.
- Watch these sectors: Advertising technology, education tech companies and clean-tech closed four fundraising rounds each, while real estate technology firms closed five rounds. Artificial intelligence, machine learning and big data companies collectively closed 10 fundraising deals.
- Male-led companies received most investments: Of the 56 local companies that raised $1 million or more, only three have female CEOs. Nationally, investment in women-led companies trended down in 2020, PitchBook reports.
Sign up here for the Business Journal’s free morning and afternoon daily newsletters to receive the latest business news impacting South Florida. For more business intelligence, follow us on LinkedIn, Facebook, Twitter and Instagram.
