VC investments up 9% for Michigan companies, despite declining deal volume

ⅤLast year, we put more money into Michigan-based companies, despite a drop in deal volume.

In 2022, the VC sector invested $1.16 billion in companies across the state, according to quarterly reports from Pitchbook and the National Venture Capital Association. This is an increase he more than 9% from his $1.06 billion in the previous year.

Michigan’s VC industry outperformed its domestic sector last year, where investment and deal volumes fell sharply, but Michigan’s 162 deals fell nearly 16%, according to the report.

Despite a dramatic decline in deal flow from the first quarter to the fourth quarter, 2022 offered “a tale of the ups and downs of venture capital” as the second most active year on record for fundraising, said Grand. Co-Founder and Managing Partner Tim Streit said.torrent base grand ventures.

Valuations declined throughout the year, starting with listed companies and “slowly moving into later stage, early stage, and by the fourth quarter we started to see an impact on seed stage valuations and terms as well,” Streit said in an email. in wrote: My biz.

Despite declining deal flow in Michigan and nationally, Grand Ventures “experienced a record year in nearly every metric: number of new investments, dollars deployed, and funds raised by portfolio companies. It’s a lot of money,” says Streit. The sectors the company targets, including fintech, his chain of supply, software development and his IT operations, and digital health, “were all pretty resilient,” he said.

“Grand Ventures believes that despite declining valuations and a short-term decline in transaction volumes, technology entrepreneurs building a brighter future are more important than ever, continuing to thrive, propelling our economy, and making extraordinary investments. We are confident that we will continue to provide home benefits and create local jobs,” Streit said.

grand rapids base Michigan Capital Network recorded 23 venture capital and angel transactions worth $11 million in 2022, compared to 26 worth $7.5 million in 2021. Investment firms have noticed a slow flow of investments and deals in the second half of the year as valuations have fallen, said principal Megan Malm. Michigan Capital Networkincludes five statewide angel investment groups and four venture capital funds.

“I still think it’s been a really strong year,” Malm said.

By early 2023, it looks like the flow of transactions will be picking up again, according to Malm.

“What we were predicting was that it was going to be a busy first quarter. It looks like it,” she said. “Many people have decided what their perceptions of the economy and macro environment are and have become accustomed to what those terms are. You can see the leads of

Among the Western Michigan deals featured in the fourth quarter NCVA and PitchBook reports were: Buell Motorcycle Company Cascade Township, which closed December 20 with an $8 million late-stage investment, and Grand Rapids-based holo footwearclosed on October 26 with a $2 million seed round.

grand rapids base Payload CMSContent management system developer has raised $5 million in a seed round involving Grand Ventures.

The largest deal in Michigan was a $67 million late-stage investment in Detroit’s First Independence Bank, which closed on Dec. 23, according to NVCA and Pitchbook data.

Nationally, the fourth-quarter Venture Monitor report called 2022 “a great year for the VC industry, with most indicators of market activity at or near all-time highs,” but a year-round Transaction volumes and value are declining quarter by quarter.

According to a Venture Monitor report, “Industry activity was very strong when compared to years outside the stratosphere 2021. …The question is, was the decline in activity in 2022 just an after-party effect of the decline in 2021? Are you just there?”

Last year, across the US, 15,852 venture deals were valued at $238.3 billion, according to NVCA and Pitchbook. This equates to him $344.7 billion in his 18,521 deals in 2021.