Venture Capital Activity Slows in Wisconsin as Startups Raise Less Funding
Venture capital activity in Wisconsin experienced a slowdown in 2023, following national trends. According to the latest quarterly report from PitchBook Data Inc. and the National Venture Capital Association, Wisconsin startups raised $261.4 million across 93 deals, a significant decrease from the previous year. In 2022, startups in the state raised $587.63 million across 109 deals, which have been adjusted from previously reported figures. This decline in funding marks a departure from the peak of 2021, when Wisconsin companies raised $599.68 million across 113 deals.
Wisconsin Startups Raise $261.4 Million in VC Funding in 2023, Down from Previous Year
The latest data shows that Wisconsin startups raised a total of $261.4 million in venture capital funding in 2023. This figure represents a decrease from the previous year, when startups in the state raised $587.63 million. The decline in funding reflects a broader trend of decreased venture capital activity both nationally and in the state. However, it is important to note that the figures have been adjusted from previously reported numbers. Despite the decrease in funding, Wisconsin remains an active hub for startups and innovation.
National VC Funding Drops in 2023, Causing Changes in the Market
The decline in venture capital funding in Wisconsin is part of a larger trend of decreased funding nationally. In 2023, startups across the country raised a total of $170.6 billion across 15,766 deals, representing a drop from the previous year’s figure of $242.2 billion across 17,592 deals. The peak year for venture capital funding was 2021, when startups raised a record $348 billion across 19,025 deals. NVCA President and CEO Bobby Franklin highlights that the market has changed, with factors such as interest rates, foreign conflict, and political risk impacting the venture capital industry.
Challenges Facing the VC Industry: Political Risk, High Interest Rates, and More
The venture capital industry is facing several challenges in the current market. The biggest challenge, according to NVCA President and CEO Bobby Franklin, is increased political risk, particularly abroad. Other challenges include high interest rates, vulnerable supply chains, and “misguided regulation.” These factors have contributed to the overall slowdown in venture capital activity and have caused changes in the market. While the drop in activity is not optimistic, Franklin emphasizes that it is important not to declare the market in crisis, but rather to recognize the changing landscape and adapt accordingly.
Top Wisconsin Startups of 2023: Bend Health, Type One Energy, Blast, Forj, and Understory
Despite the overall decrease in venture capital funding, several Wisconsin startups managed to secure significant investments in 2023. Here are the top five startups that raised the most VC funding in the state:
- Bend Health: Raised $31.2 million in Q1 2023. Located in Madison, Bend Health operates in the healthcare technology sector.
- Type One Energy: Raised $30.7 million in Q1 2023. Located in Middleton, Type One Energy focuses on alternative energy equipment.
- Blast: Raised $25 million in Q4 2023. Located in Middleton, Blast specializes in financial software.
- Forj: Raised $15 million in Q1 2023. Located in Waukesha, Forj operates in the business software sector.
- Understory: Raised $13.13 million in Q2 2023. Located in Madison, Understory is involved in insurance technology.
These startups represent a diverse range of industries and highlight the continued innovation and entrepreneurial spirit in Wisconsin, despite the challenges faced by the venture capital industry. Despite the overall slowdown in funding, these companies have managed to attract significant investments and contribute to the state’s startup ecosystem.
Analyst comment
Positive news: Despite the overall slowdown in venture capital funding in Wisconsin, several startups managed to secure significant investments in 2023, highlighting the continued innovation and entrepreneurial spirit in the state. This shows that Wisconsin remains an active hub for startups and innovation.
Neutral news: Venture capital activity in Wisconsin has experienced a slowdown in 2023, following national trends. Startups in the state raised less funding compared to the previous year, reflecting a broader trend of decreased venture capital activity both nationally and in the state.
Negative news: Venture capital funding has decreased in Wisconsin and nationally in 2023. This decline in funding marks a departure from previous years and is attributed to factors such as increased political risk, high interest rates, and other challenges facing the venture capital industry.
