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Md. continues venture capital momentum with $405 million in Q1

(Irochka / Depositphotos.com)

(Irochka / Depositphotos.com)

Maryland companies continued last year’s strong performance in receiving venture capital investments, sparked by the large Viela Bio deal, according to the quarterly MoneyTree Report from PricewaterhouseCoopers LLP and CB Insights.

With more than $405 million invested last quarter, Maryland recorded its best start to the year since 2000 and has already beat yearly totals for five of the past nine years.

“Anyway you cut it, Maryland had a great quarter,” said Brad Phillips, director of emerging company services at PricewaterhouseCoopers.  “From the standpoint of Maryland and the number of dollars invested, this was a historic quarter for the state.”

But the first quarter’s gaudy numbers came from just 16 deals, continuing a recent trend, both in Maryland and nationally, of more money invested in fewer deals.

Last quarter’s leading investment came from the $250 million put into MedImmune spinout Viela Bio. Most of that investment came from MedImmune parent company AstraZeneca and Chinese capital.

While venture delivered one of the best first quarters in Maryland in years, funding fell slightly from the last quarter of 2017, when more than $411 million was invested. Still, this first quarter was the third-best for Maryland since 2001.

It also marks the first time since 2007-2008 that Maryland has had five or more straight quarters of more than $100 million raised.

“Maryland’s got a bit of a winning streak there. Several of those quarters have been significantly higher than that,” Phillips said. “If you go back to 2011, the $100 million quarter was pretty normal. Then we took a bit of a dip over the years preceding the last 4 quarters.”

Just as encouraging has been that these quarters have been buoyed by the megadeals of more than $100 million for the last three quarters and investment in early-stage companies.

Those success could help lead to more success in the state down the line, Phillips said.

“It’s encouraging because we think that there are some successes here in the region and people are becoming aware that they can hit a home run in this region,” he said.

Viela Bio led the way for Maryland’s biotech sector during the quarter. Dracen Pharmaceuticals, NexImmune, eNeura Therapeutics, Graftworx and Tissue Analytics also appeared in the state’s top 10 deals for the quarter.

The rest of the top deals included computer services firm Catalyte, mobile real estate software Homesnap, data firm Protenus and membership management software MotionSoft.

While these companies did well to find funding, recent startups have had more difficulty. It was the worst quarter for seed funding in five years, with just one deal for $1 million.

“There are advantages of having seed-stage deals because we want to continue to backfill these projects in our ecosystem,” Phillips said. “Each company is a project that we hope is going to succeed. … We like to see a lot of money coming in, so we like the big deals. But you can’t ignore the seed-stage deals.”

Phillips said the problems with seed-stage funding extend nationally and are not just a Maryland concern.

Top Md. 10 deals 1st quarter 2018
Viela Bio Gaithersburg $250,000,000
Dracen Pharmaceuticals Baltimore $40,000,000
Catalyte Baltimore $27,000,000
NexImmune Gaithersburg $23,000,000
eNeura Therapeutics Baltimore $17,000,000
Homesnap Rockville $14,000,000
Protenus Baltimore $11,000,000
MotionSoft Rockville $8,050,000
Graftworx Bel Air $7,510,000
Tissue Analytics Baltimore $5,000,000


Source: The MoneyTree Report

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