Venture capital investing in Michigan held up well through midyear compared to national trends, as the number of deals were essentially even while the amount invested nearly doubled.
A quarterly report from Pitchbook.com and the National Venture Capital Association counted 76 deals in Michigan during the first six months of 2022 totaling $657.1 million. That compares with 77 deals in the first half of 2021 for $341 million.
In the second quarter alone, venture capital investors invested $291.3 million into 29 deals, versus 34 deals for $147.4 million in the April-to-June period a year earlier.
Michigan Venture Capital Association Executive Director Ara Topouzian acknowledged that “it is still too soon to see how 2022 will end up,” citing ongoing factors such as inflation, high gas prices and the war in Ukraine that could affect investment activity in Michigan.
“With that said, I think the VC community is experiencing a more normalized valuation of companies this year compared to last,” Topouzian wrote in an email to MiBiz. “I am still optimistic on the future. Michigan has come a long way and (is) getting the recognition it deserves in the Great Lakes region.”
Several West Michigan-based companies received venture capital investments in the second quarter, according to the quarterly Pitchbook report. They included:
- CertifID LLC, a Grand Rapids-based company that developed a software to protect money wire transfers in real estate transactions. The company closed on $12.5 million in venture capital investments in May.
- Claira Technologies Inc., a Grand Rapids-based firm that helps employers better understand their pool of competencies. The company closed in April on a $5 million capital round.
- HealthBridge Financial Inc., a Kentwood-based health care fintech which closed June 21 on a $3 million capital round. HealthBridge works with companies to provide employees an option to pay off the out-of-pocket portion of their medical bills. HealthBridge pays the care provider a percentage of what a person owes, and then works directly with patients on a payment plan, enabling them to pay the amount over time.
Nationwide, venture capital investments in the second quarter declined in both the volume of deals (3,374 versus 4,268) and the amount invested ($62.3 billion versus $81.2 billion) compared to a year earlier.
Second quarter activity also dipped compared to the first three months of this year, when venture capital investors put $81.9 million into 4,467 deals, which was also down compared to 2021.
“The second quarter of 2022 brought an expected continuation of market tightening in some parts of the U.S. venture ecosystem,” NVCA President and CEO Bobby Franklin said in a statement. “However, the industry’s record dry powder (of $230 billion) continues to fuel critical innovation that is addressing the country’s important needs. The venture industry’s long-term view of investing, even during uncertain fiscal times, is further proof it is a reliable economic engine with an eye toward funding the next generation of great American companies.”
Venture capital investing through midyear totaled $144.2 billion across 7,841 deals, which was down compared to $158 billion for 8,728 deals in the first six months of 2021, according to Pitchbook and NVCA data.