Minnesota tech companies are poised to break another record for venture-capital investments this year if the pace of first-quarter deals continues.
As the state and local economy continues to recover from the negative economic impact of the COVID-19 pandemic, Twin Cities firms raised $282.8 million through 44 deals.
The deal count is the highest for any quarter in the past seven years, while the dollar figure is the largest amount for the first three months of any year in that time span, according to PitchBook, a Seattle-based private capital market data provider.
To compare, local companies attracted $220 million in the same quarter in 2020, and $168 million for the three-month period in 2019.
Overall, Minnesota startups orchestrated 50 deals to begin 2021, leading to $286.9 million in capital investments.
NeoChord in St. Louis Park attracted the most money from investors in the quarter, closing on a $32 million, Series D round to support the development of its minimally invasive mitral-repair system.
GrandPad in Minnetonka, which created a tablet for seniors who have no experience using technology, was not far behind with $30 million.
The investment landscape for venture-capital-backed companies in the Twin Cities mirrors a national trend, as experts anticipated a strong start to 2021 following a record-setting year for deal flow in 2020.
A new report from PitchBook shows investors deployed $69 billion into U.S. companies in the first quarter, a 92.6% increase relative to the year-ago quarter.
If the pattern of higher deals continues, Minnesota companies could surpass last year's record of $1.86 billion in total capital investments.
"Elevated VC activity across investments, fundraising and exits are already on track to set new records by the end of the year," said John Gabbert, founder and CEO of PitchBook, in a statement. "With record levels of VC fundraising in 2020 and dry powder still sitting at all-time highs, investors continue to write ever-larger checks at both the early and late stage, which has only been fueled further by nontraditional investors looking to capitalize on the VC investment universe and valuation growth before liquidity."
The first-quarter investment total for companies across the Minneapolis-St. Paul metro is sixth largest, of any quarter, for the region dating to 2014, per PitchBook.
Other notable capital raises by local companies during the quarter:
• Gravie, a Minneapolis health insurance firm, closed on a $28 million Series D round.
• Eden Prairie-based Compute North raised $25 million to fund its operations for managing sites for companies in the blockchain cryptocurrency space.
• Energy-management software firm 75F in Bloomington raised $23 million.
• Plymouth-based med-tech company Nuvaira closed on a $21 million round.
Nick Williams • 612-673-4021