Report Shows 'Promising Start' for Indiana VC Investment

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Ting Gootee is the chief investment officer for Elevate Ventures. (photo courtesy of AgriNovus Indiana) Ting Gootee is the chief investment officer for Elevate Ventures. (photo courtesy of AgriNovus Indiana)

A new report from Indianapolis-based Elevate Ventures says venture investment activity in Indiana is off to a "promising start" this year. The organization's 1H 2019 Indiana Venture Report shows the state is on track to exceed the number of venture capital deals reached in 2018. The report examines Indiana's economic opportunities and business climate, national venture capital trends and analysis among Great Lakes and Midwest states.

The report says venture capital deals in Indiana for the first half of 2019 totaled $151 million, which is more than half the overall total for 2018. In an interview with Inside INdiana Business, Elevate Ventures Chief Investment Officer Ting Gootee said while Indiana is seeing growth in a number of metrics, the average deal sizes continue to lag. 

"Over 80 percent of venture capital deals reported in Indiana in the first half of 2019 were less than $5 million and below," said Gootee. "Nationally, we've observed in the marketplace that deal sizes are getting increasingly bigger as companies are getting into later stages of development. Particularly, mega deals over $100 million in capital raised are becoming more and more common. So on a relative scale basis, we're encouraged in terms of the number of startup activities in Indiana, but we still need the cohort of scale-up or breakout companies that can really raise the next round of capital."

The report says Indiana has 53 venture capital deals in the first half of the year, which ranks 2nd among the seven Midwest states. Gootee says moving companies from the startup stage to the scale-up stage will create an opportunity for Indiana to move to the next level.

"Because of the still limited number of local-based funds or investment groups, there is an opportunity for us and other stakeholders to really coordinate and maybe focus on the handful of scale-up opportunities that we can really drive their next level growth. Some of the top priority items include functional senior leadership recruiting, especially as these companies go from being a local/regional company to hopefully a national company, but also the continued connectivity to funds that are much bigger than our regional or local funds."

More than $58 billion in venture capital was invested in over 3,600 companies throughout the U.S. in the first half of 2019. Indiana accounted for 0.26 percent of all that total, which is up from 0.22 percent in 2018.

Some of the larger VC deals cited in the report include Indianapolis-based Kerauno closing on $25 million in Series A funding, as well as Sharpen Technologies, also based in Indy, securing $15 million in capital funding. Bloomington-based FormAssembly also landed $10 million in Series A funding.

You can view the full 1H 2019 Indiana Venture Report in the document below or by clicking here.

Gootee said while Indiana is seeing growth in a number of metrics, the average deal sizes continue to lag.
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