Amid national venture market leveling, Indiana innovators and investors gather at TechPoint’s 2023 Venture Connect
TechPoint’s annual summer Venture Connect event will see nearly 90 innovators and investors from around the country as each seeks a partner, or partners, in accelerating digital innovation into market.
It’s the largest gathering to-date for the event that has been happening in various iterations since 2015 and the only Indiana-focused startup-investor meetups this year. It’s also an effort taking place against a national backdrop of continued venture market adjustment from the 2022 high watermark.
Crunchbase data showed global venture funding in Q2 2023 fell 18% quarter over quarter to $65 billion, down 49% compared to the second quarter of 2022, when startup investors spent $127 billion. The first half of 2023 is down by similar proportions. In the first half of 2023, global funding reached $144 billion, marking a 51% decline from the $293 billion invested in H1 2022 and a 10% decline from the second half of 2022.
TechPoint’s Q2 Venture Capital Report, which analyzes local activity, showed 36 deals involving Indiana tech companies from April to June, for a total of more than $47 million in investments. Q1’s results, by comparison, showed 33 deals, totaling $66 million in investment.
The Q2 results, like Q1, do not fully report all that was invested in Indiana tech companies, as some companies do not disclose the financial terms of their capital raises particularly those with challenging financial terms. In Q1, other sources of financing, for example, would have elevated the quarterly investment to nearly $200 million. Five of the second quarter’s 33 deals did not disclose financial details.
“The trickle-down market effect from later-stage deals now to the seed and early-stage deals, especially around decreased valuation, has been shaping this year’s activities,” explained TechPoint President and CEO Ting Gootee. “This has a significant impact on an emerging venture community like ours where most founders are still relying on seed-stage funding to prove out market traction and compete for early-stage investments. The more investor connections we can create through events like our Venture Connect, IU Founders & Funders Network Venture Summit, the Venture Club’s Innovation Showcase and Rally, the more opportunities we are creating collectively for our founders.”
Also worth noting, Gootee said, is that in 2015, only nine investors were present to meet with 19 Hoosier innovators, chosen from the pool of past and present TechPoint Mira Awards winners.
“Since then, we have set a high bar of attracting more out-of-state investors, and we have seen the rise of home-grown investment funds,” she said. “So while we’re seeing a reflection of the national trend for more cautious investment, we shouldn’t lose sight of how far we’ve come as we continue to work for more growth.”
Additionally, Pitchbook’s analysis of the national venture ecosystem indicates that it is finding its footing after the recent correction and opines that U.S. startups may end 2023 with capital raise totals similar to 2020.
The TechPoint analysis of Q2 activity in Indiana showed that Elevate Ventures participated in at least 16 of the Q2 deals, with many of these investments taking place as part of their Nexus Pitch Competitions. Flywheel Fund of Bloomington continues to be active in the state with six investments this quarter. High Alpha was involved in two deals that included the launch of two new studio companies.
Distribution of deals was spread out among the state. While Central Indiana still garnered most of the activity with over 30% of the deals, other regions held their own with 11 deals spread out among the three of the southern regions and eight spread out among three northern regions.
Merger and acquistion activity continued to be slow with just four deals recorded. See the full report here.