Investments in startups took a step back in the state and nation in the first quarter as falling stock prices, inflation and war in Europe dampened investor enthusiasm.
Only one Colorado Springs company, Roth Industries, raised funds in the first quarter. The company, which sells prepared foods to major grocery chains, raised about $1 million in capital raises from existing investors to fund new product launches.
That’s a sharp drop from the $200.4 million raised in the same quarter last year. That total, however, included a record $200 million snagged by Quantum Metric, which helps companies find their best online revenue opportunities. The deal made the Colorado Springs company the first “tech unicorn” – a company with a market value of over $1 billion.
While this year’s first quarter total pales in comparison to a year ago, it was about five times the $200,000 raised in the previous quarter, according to a report by PitchBook and the National Venture Capital Association.
Statewide seed funding in the first quarter fell nearly a third from the first quarter of last year to $1.05 billion. The first-quarter total was also down nearly two-thirds from a record $2.87 billion in startups in the fourth quarter of last year. The two largest contracts in the state were awarded to Denver’s environmental measurement company Project Canary, $111 million, and Evolve Vacation Rental, $100 million.
Nationwide, startups snagged $70.7 million in the first quarter, down 8.1% from last year’s first quarter and 25.9% from a record high of 95. $4 million secured in the last quarter of 2021. The largest deals included $3 billion to California pharmaceutical maker Altos Labs and $935 million to California freight forwarder Flexport.
The report by Pitchbook, a Seattle-based research unit of Morningstar, and the National Venture Capital Association, a venture capital trade group, is different from other reports on venture capital activity because it also includes angel investments from high net worth individuals and “seed” investments. groups that support startups before they receive money from venture capital funds.