Midwest, Iowa see fewer VC deals in 2016, report says

(Photo via StartupStockPhotos.com)

The broader Midwest and Iowa both saw fewer venture capital deals in 2016 than 2015, according to a new report.

Startups in the Midwest and the North Central U.S. also raised less money last year than in 2015, according to a PwC/CB Insights MoneyTree Report released last week. The report places Iowa in the North Central region, along with Minnesota, the Dakotas, Nebraska and Kansas.

The Midwest had 348 deals that raised about $2.2 billion in 2016, compared to 362 deals and about $2.4 billion raised in 2015.

The North Central region saw 59 VC deals that raised about $523 million in 2016, compared to 84 deals that raised about $679 million in 2015.

Four of those deals involved startups with locations in Iowa.

Even though Iowa also saw a fewer number of VC deals (4 in 2016 compared to 6 in 2015), startups raising the money brought in more than in 2015 ($39.4 million in 2016 to $34 million in 2015).

One of the 2016 Iowa deals is a $20 million raise by Farmers Business Network, which has operations in Davenport. The report counts this as an Iowa-based raise, but Farmers Business Network is based in San Carlos, California.

The other three Iowa deals in the 2016 report are:

• A $4.4 million raise by Involta, the Cedar Rapids-based data center company.
• The $5.14 million investment Vida Diagnostics announced late last year.
• A $9.88 million raise from MetaCommunications, the Iowa City software company.

Other deals announced in 2016 may not be included in MoneyTree’s count. For instance, West Des Moines-based Funnelwise announced a $7 million raise last February, but that raise is not listed in the report for 2016.

The MoneyTree report also does not include grants or loans provided by state agencies, so money provided by the Iowa Economic Development Authority is not included in the overall dollar amount.

The report does provide a historical look, though, on venture capital raises in Iowa and the Midwest:

Total VC $ in millions (# of deals)
Year United States Midwest North Central Iowa
2009 $21,524.6 (2,696) $911.8 (156) $396.4 (70) $64.0 (6)
2010 $25,748.3 (3,357) $2,196.8 (215) $258.8 (58) $21.9 (4)
2011 $36,224.0 (4,145) $2,195.8 (311) $454.9 (66) $6.9 (1)
2012 $32,568.2 (4,559) $1,673.1 (326) $425.8 (65) $36.7 (3)
2013 $35,856.1 (4,940) $1,599.9 (327) $412.8 (84) $18.1 (3)
2014 $58,851.0 (5,579) $2,601.9 (372) $1,012.8 (102) $136.7 (13)
2015 $73,354.8 (5,409) $2,353.6 (362) $678.8 (84) $34.0 (6)
2016 $58,590.2 (4,520) $2,161.7 (348) $522.7 (59) $39.4 (4)
Source: PWC/CB Insights MoneyTree Report

Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.