Missouri Startup Ecosystem 2018 Update
Recently released data shows that Missouri companies raised more venture capital in 2018 than in any prior year. The 2018 data shows that Missouri companies raised 609 deals and $1,560,814,753 in venture capital from
2011 – 2018.
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Missouri Companies Raised the Highest Total Capital to Date In 2018
In 2018, Missouri companies raised approximately $307 million in venture capital, the highest amount recorded by the Venture and Angel Capital Report. The total venture capital raised by Missouri companies grew by almost $50 million from 2017 to 2018. This continues a generally upward trend in total capital raised for Missouri companies since the report began in 2011.
Including 2018, the total capital raised by Missouri companies grew to $1,560,814,753.
The Total Number of Deals Fell
While total venture capital invested rose in 2018, the number of venture capital deals fell in 2018. Deal volume in 2018 was 71 deals compared to 111 in 2017. There may be several reasons for the decline including investors flocking to companies showing strong exit potential. 2017 had a record-high number of venture capital deals with over 30 deals more than any other year in our reporting period.
Including 2018, the total capital raised by Missouri companies grew to 609 deals.
The Average Deal Size In Missouri Almost Doubled
With deal volume decreasing and total capital raised increasing, it is not surprising to see the average deal size in Missouri increase. In 2018, the average and median deal size were at their highest in our reporting period. The average deal size in 2018 was $4,324,233 and the median deal size was $2,000,000. Prior to 2018, the average and median deal size had remained relatively consistent. The increase in 2018 is likely caused by several factors including a higher proportion of companies raising money in the healthcare and biotechnology space. The rise may also be caused by an increase in later-stage companies as the ecosystem continues to grow.
Corporations Remain Widely Preferred Over LLCs
In the majority of years we examine, the deal volume and capital raised by corporations exceeds the deal volume and capital raised by LLCs. Nationally, corporations tend to be the preferred entity type compared to LLCs by institutional angel and venture capital investors. There is a decisively upward trend in the total capital raised by corporations between 2011 and 2017. This trend is further exaggerated in 2018. This aligns with the national trend of corporations as the preferred entity type for companies raising venture and angel capital.
SaaS, Biotechnology, and Healthcare Companies Had High Deal Volume
From 2011 to 2018, 31% of the deal volume in Missouri was made up of SaaS companies. In 2018, 35% of the deal volume was done by SaaS companies. SaaS companies were followed by biotechnology companies which made up 20% of deal volume in 2018, and healthcare companies which made up 17% of deal volume in 2018. Manufacturing companies also made up a significant portion of deals with 13% of deal volume. In 2018, more manufacturing deals were reported than in any other year we examine. Agriculture companies, which made up 8% of the deal volume, continued an upward trend in deal volume across the reporting period.
SaaS, Biotechnology, and Agriculture Companies Raise the Most Capital
SaaS companies accounted for 26% of the capital raised in Missouri from 2011 to 2018. In 2018, SaaS companies raised 41% of the total venture capital. SaaS companies were followed by agriculture companies, which raised 24% of venture capital in 2018, and biotechnology companies which raised 13% of venture capital in 2018. In prior years, healthcare and biotechnology companies had raised more capital than other industries in almost every year. While 2018 does not change the total numbers from 2011 – 2018 drastically, it does indicate a surge in investment in the SaaS and agriculture space.
St. Louis Remains The Most Active City
St. Louis remained the most active city for venture capital activity in 2018. St. Louis companies raised 55% of the total venture capital in the state, and 50% of deal activity was done in the city. Kansas City remained the second most active city for venture capital activity with 34% of capital going to companies in Kansas City and 30% of deal volume happening in Kansas City.
As with many states outside the major hubs, Cara Stone strongly encourages states to work together and keep open communications about their venture capital and fundraising goals.
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The Missouri Venture and Angel Capital Report is a free resource for companies at every stage of their lifecycle. The report is regularly updated with new data and statistics such as average deal size by industry, industry clusters by city, formation states, valuation data, and more.
Recently released data shows that Missouri companies raised more venture capital in 2018 than in any prior year. The 2018 data shows that Missouri companies