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More venture funding goes to Md. companies in Q3 despite fewer deals

BrainScope Co. Inc's. BrainScope One aims to help clinicians provide a rapid, objective assessment of mild head injury, including concussion. (Business Wire photo)

BrainScope Co. Inc’s. BrainScope One aims to help clinicians provide a rapid, objective assessment of mild head injury, including concussion. The company recived $16 million in venture capital during the third quarter (Business Wire photo)

Venture capital invested more than $181 million over 13 deals with Maryland-based companies in the third quarter of 2017, a higher total than last quarter and the same quarter last year, according to the quarterly PricewaterhouseCoopers/CB Insights MoneyTree Report.

The 13 deals were the fewest number of deals since the third quarter of last year.

The overall amount invested in Maryland companies was buoyed by $103 million invested in SpringWorks Therapeutics, a drug company spun off of Pfizer last month with investors including Bain Capital, LifeArc and OrbiMed Advisors.

It was a good quarter for the state, said Brad Phillips, director of emerging company services at PricewaterhouseCoopers.

“Maryland’s had a comparatively good year through three quarters,” he said, noting that with $73 million of investment in the fourth quarter, Maryland could double its total from 2016.

The big investment in SpringWorks could help the state attract capital. Last month, a Johns Hopkins study indicated Maryland is struggling to keep businesses in the state as they seek capital elsewhere.

Having big rounds could get other investors interested, Phillips said. “It gets out that there are great companies that people are investing $100 million in this region and (venture capital investors) outside of the region take notice of that, … and start looking for more deals,” he said. “Anytime we have one of those, it’s a really good thing.”

Looking at the national trends could also indicate a way for Maryland to attract more investment. Some $19 billion was invested nationally, the third-best quarterly dollar total since 2001. That number included 26 megadeals of greater than $100 million. But the number of deals overall has declined the past couple years.

The U.S. is on pace for its lowest number of deals since 2012, and Maryland is no exception to the trend. The state has averaged about 15 deals a quarter the last two years, down from more than 23 a quarter in 2014.

The numbers indicate that more of the capital is going to expansion stage companies, Phillips said. If Maryland wants to attract more capital, it needs to do a better job of getting companies to those later stages.

“If you’re up in the number of deals, that means, we look at each of these companies as an experiment that’s getting funded,” Phillips said. “Both of them are critical. We really like to see lots of companies getting funded so that they can get to that next level.”

But Maryland is doing well compared to its peers in the greater Washington metroplex, which includes Virginia and the District of Columbia.

Maryland attracted 58 percent of the venture capital in the region and had three of the top five deals.

The other top deals in Maryland included $20 million for quantum computing company IonQ, based in College Park. BrainScope, a Bethesda-based medical device company received $16 million. Dragos, a Fulton-based cybersecurity company received $10 million.

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