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Coastal Startups Don’t Have A Monopoly On Raising Big At Early Stage

Early-stage startups throughout much of the U.S. are able to raise larger sums today than any other point in at least a decade, and there are more early-stage rounds than ever, both in North America and globally. (Note: “Early stage” is defined here as Series A and Series B rounds, plus smaller rounds from several other round types including equity crowdfunding and convertible notes.)

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In analysis published earlier this week, we found that the nationwide average early-stage deal grew over 20 percent between 2017 and 2018. We quantified that companies on the coasts raise more than their inland counterparts and found some indications that the Midwest lags the rest of the nation.

To find this and more, we aggregated round size data for over 30,000 early-stage venture rounds struck with U.S.-based companies between the start of 2008 and the end of 2018. We segmented the data by the (basically, subregions by a different label), took the mean (average) early-stage deal size for each calendar quarter, and displayed each region against the national average.

Below, you can see how early-stage rounds around the country compare to the national average. To make it easier to see trends, we display a two-period simple moving average line alongside individual data points.

Although the average has certainly crept up, part of that is attributable to a newer trend in companies raising huge sums of money. In the report, we indicated that many of the largest early-stage rounds were raised by companies in the West and Northeast. But startups in these regions don’t hold a monopoly on raising lots of money from venture capitalists.

Here, we wanted to highlight some of the biggest early-stage rounds struck by Midwestern and Southern companies. After all, the coasts tend to dominate the media’s conversation concerning tech. So, here’s some love for the middle of the country, and its biggest deals:

The Five Biggest Early-Stage VC Rounds Raised By Southern Startups In 2018 And January 2019

  1. Hailing from Atlanta, , a company aiming to help homeowners streamline the process of trading up for a new house, raised funding in a deal announced on January 15, 2019. Crunchbase News covered the transaction, which was led by and was composed of an undisclosed blend of equity and debt.
  2. , based in Gaithersburg, Maryland (which, by the Census Bureau’s definition, is in the South), is a clinical-stage therapeutics company developing novel molecules for treating severe inflammation and autoimmune disorders. The company announced in February 2018. Viela Bio of biopharmaceutical conglomerate .
  3. Another company entering the home-flipping market is Austin-based , which announced back in September 2018. Austin-based financial services company and its real estate investment subsidiary were the sole sources of capital on the deal.
  4. Another Atlanta company, raised announced on December 31, 2018. A number of blockchain-focused , alongside Microsoft’s early-stage VC arm and the .
  5. Crunchbase News broke the story of Raleigh, NC-based gene editing company ’s based on an SEC filing spotted back in June 2018. The company the round several weeks after the initial filing. The round was led by , which was joined by that participated in the round.

The Five Biggest Early-Stage VC Rounds Raised By Midwestern Startups In 2018 And January 2019

  1. , a Minneapolis-based “on-demand” health insurance company, raised in February 2018. The company offers a core plan to cover the basics plus the option to purchase coverage for, say, a surgery, only when that coverage is needed.
  2. , based in Columbus, Ohio, is developing non-opioid pain treatments. The pharmaceutical company raised round announced in April 2018. . With nearly , Ohio is one of the states worst-affected by the surge in opioid abuse.
  3. Detroit-based sneaker and streetwear marketplace company copped back in September 2018. and co-led the round.
  4. , a Chicago-based auto insurance marketplace platform, raised round. Crunchbase News covered the transaction, which was led by . Local firm and angel ring participated in the round.
  5. , also based in Chicago, raised announced in May 2018. The company builds data analysis and social networking tools for financial market participants.

It’s true that the Bay Area is responsible for a huge chunk of the supergiant venture market, but it by no means accounts for all of it. The above should lay to rest the idea that there’s no tech in between EWR and SFO.

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