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Indiana venture capital deal activity hits 16-year high

January 11, 2017

High-growth Indiana companies captured nearly $80 million on 31 venture capital deals in 2016, according to a new report—reaching a 16-year-high for deal activity that underscores Indiana's growing variety of companies ripe for venture investments.

Local and national investors deployed $77.2 million to Hoosier firms in 2016, according to The PwC/CB Insights MoneyTree Report released Wednesday. While the total haul is far less than the $157 million secured in 2015, the 31 deals exceed the 27 in the previous year and mark the highest number of Indiana VC transactions since 34 deals closed in 2000.

Indiana companies landing VC in 2016 include mature operations such as internet-of-things firm CloudOne, which landed $9 million in April, and newcomers like health analytics company Springbuk, which reeled in $3.75 million in May. High Alpha Studio, led by manging partner Scott Dorsey, debuted three portfolio companies in 2016—ClearScholar, Doxly and Zylo—that each completed seven-figure fundraising rounds.

Indiana saw eight venture deals worth $14.4 million in the last three months of 2016, The MoneyTree report said, up from the three deals worth $9.7 million in the fourth quarter of 2015. The top deals in the latest quarter involved BidPal, which raised $3.5 million, and Zylo, which raised $3.3 million.

IT-services firm Kinney Group and marketing-software company Perq each raised their first rounds of venture capital—despite both firms being more than a decade old. Kinney Group raised $2 million, thanks in part to investors it met at a TechPoint event, and Perq raised $1.7 million from Carmel-based 4G Ventures.

The largest deal of 2016 involved NiCo Corp., an Indianapolis-based neurological medical device manufacturer, which secured a $15 million capital injection.

Despite the increased deal activity, Indiana only sees a sliver of national venture investments, which totaled $58.6 billion on 4,520 deals in 2016. And those national numbers are trending south, The MoneyTree report found, with fourth-quarter deals and dollars invested each slipping to an eight-quarter low.

The year 2017 kicked off with two fund-raising announcements—$13 million by Smarter HQ and $1.25 million by ClearScholar, although ClearScholar's haul was included in the Money Tree report's 2016 tally. Firms including ClusterTruck, Diagnotes, and UpperHand are soon expected to announce new capital infusions.

MoneyTree had been basing its reports off Thomson Reuters data until it began using CB Insights data in the fourth quarter.

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