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Md. venture-backed startups post 4th straight $250 million quarter

Facet Wealth's CEO and co-founder Anders Jones. (Facet Wealth)

Facet Wealth’s CEO and co-founder Anders Jones. (Facet Wealth)

Maryland startups continued a recent hot streak as the state recorded more than $251 million raised across 21 deals during the year’s third quarter, leaving the state in position for one of its strongest years ever.

That represents a 35 percent increase over the same quarter last year, when startups raised $185 million over 16 deals, according to the quarterly MoneyTree Report from PricewaterhouseCoopers LLP and CB Insights.

The strong third quarter puts Maryland firmly in position to finish one of its strongest years ever at attracting venture capital to the state. The quarter was the lowest this year, after state-based companies raised more than $411 million in the first quarter and more than $255 million in the second quarter. Startups in Maryland have not raised less than $100 million since the fourth quarter of 2016.

The year’s total is already $918 million, putting the state on pace to raise more than $1 billion for the first time since 2001. 2000 and 2001 are the only years Maryland companies have raised more than $1 billion over the life of the MoneyTree report, which goes back to 1995.

This quarter’s haul was not limited to any specific sector but was lifted by some big deals in software, health care and finance.

Software firm Sonatype led the state in venture capital raised during the third quarter, with a $80 million expansion round. Other top deals this quarter included $36 million for Johns Hopkins biotech startup Neuraly; $33 million for finance firm Facet Wealth; $25 million for manufacturing startup Xometry; and $25 million for Fidelis Cybersecurity.

The results could be a sign that Maryland is on its way toward a more sustained venture capital ecosystem. The area has historically had trouble attracting venture capital, but recent successes have helped to grow awareness of the quality of companies coming out of Maryland.

Some of the companies represented in this quarter’s report moved to Maryland for their business, including Sisu Global Health, which raised $1.2 million and Facet Wealth.

“I am very bullish on Baltimore as a tech ecosystem,” Facet Wealth co-founder and CEO Anders Jones told The Daily Record last month. “It’s great to see that Baltimore is kind of getting on the map and on the radar of outside companies.”

While the story in Maryland has been a steady string of successes, the story nationally continues to be growth in mega-rounds of more than $100 million but fewer overall deals, leading to some concern about early stage companies.

There were 55 mega-rounds of more than $100 million and six rounds greater than $500 million across the nation. That included $1 billion rounds for New York’s WeWork and California’s Lucid Motors.

Nationally, the $27.5 billion was invested across 1,229 deals in the third quarter. That is nearly $7 billion more invested from the same quarter last year, despite 250 less deals this quarter.

Globally, $53 billion was invested across 3,408 deals, the MoneyTree report said. That also continued a trend of rising funding but a decrease in overall number of deals.

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