While tech investment has slowed for 2022, one aggregator is contributing to Ohio’s 189% increase in venture capital investments.
Venture capital investment and tech company IPOs nationwide have cooled off so far in 2022 after a scorching 2021, but Ohio appears to be bucking the trend.
In Northeast Ohio, one March transaction — the $204 million funding of Society Brands, the Amazon aggregator in Canton, Ohio — pushed up the region’s venture capital investments 189% in the first quarter from the year-ago quarter, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association.
For all of Ohio, the nearly $71 billion combined value of VC investments in startups and later-stage tech for the first quarter was lower than in any quarter of record-breaking 2021 — but still higher than the levels of prior years, according to the Venture Monitor report.
Ohio appears to be bucking the trend, mainly because of three mega-rounds so far that alone total more than the state’s $454 million in the first quarter 2021. Those were:
- Enable Injections, of Cincinnati, $215 million in January.
- Astronomer, of Cincinnati, $213 million in March. Southwest Ohio has seen three nine-figure rounds in the past seven months, sister publication Cincinnati Business Courier reported.
- Society Brands, of Canton, $204 million in March.
But the state’s only IPO so far this year is Cincinnati’s Blue Water Vaccines in February, which has seen its share price drop 80% through early April, the Courier reported.
And IPOs for venture-backed companies have slowed drastically this year after many newly minted stocks struggled last year, including Columbus-based Root Inc.
While VC deals in Central Ohio slowed markedly in the first quarter after being responsible for $1.55 billion of the state’s record $2.4 billion in investments last year, deals in Northeast Ohio picked up, thanks to the Society Brands investment.
Through March, Central Ohio startups raised just more than $155 million, according to Columbus Business First research of announced rounds and regulatory filings.
Using comparable PitchBook data, Northeast Ohio completed 15 top deals in the first quarter, totaling $272 million. That compared to 12 top deals that totaled $94 million in the first quarter of 2021.
The Cleveland, Akron and Canton combined statistical area raised a total of $307.5 million during the first quarter, according to an analysis by Cleveland-based venture developer JumpStart Inc., which has access to the entire PitchBook database.
That was second only to the Cincinnati, Wilmington and Maysville area, which raised a total of $504.5 million in venture capital during the first quarter, according to the JumpStart analysis.
The Amazon aggregator raised $204 million in debt and equity in March to acquire e-commerce consumer product brands with a heavy concentration on Amazon.