Indiana firms see big drop in venture funding

Back to TopCommentsE-mailPrintBookmark and Share

Venture capital investments in Indiana trended down in 2012, but local investors see the market here steadily gaining strength.

Payments to venture-backed companies in Indiana totaled $84.1 million last year, according to data released Friday by PricewaterhouseCoopers and the National Venture Capital Association.

In 2011, venture payments totaled $177.9 million. While the 53-percent dropoff was large, most of it could be explained by the unusually large amounts raised in 2011 by Indianapolis tech stars Angie’s List Inc. and ExactTarget Inc., which raked in $55 million and $30 million, respectively.

Both companies staged initial public offerings soon afterward. Those successes, along with the acquisition of marketing software maker Aprimo Inc., have more venture capitalists eyeing Indiana’s IT sector, said Don Aquilano, managing director of Allos Ventures LLC, which has offices in Indianapolis and Cincinnati.

“I’ve spoken to a number of firms that have said, ‘Boy, what’s going on in Indiana. We’d like to learn more about the deal flow in Indiana,’” said Aquilano, whose firm is set to close this month on a new $40 million fund primarily focused on software and IT companies.

In 2012, computer and software companies continue to raise the most money, accounting for nearly $53 million of Indiana’s total take. The biggest haul went to Indianapolis-based Orbis Educational Services Inc., which raised $24.3 million from Philadelphia-based LLR Partners Inc. to grow its nurse education software business.

Also, Indianapolis-based Scale Computing Inc. raised $8.2 million last year.

“I see a lot of activity in the marketplace right now. And I expect more capital to come online in the next year,” Aquilano added.

Total venture funding in 2012 was a tick ahead of 2010, when Indiana companies raised $80 million.

Health care and life sciences companies accounted for most of the rest of the investment. Indianapolis-based Esanex Inc., a cancer development firm, raised $16.5 million last year from Indianapolis-based Lilly Ventures, Indianapolis-based BioCrossroads and North Carolina-based Intersouth Partners.

Also, Indianapolis-based Nico Corp. raised $6.6 million to continue funding growth of its brain-surgery tools.

David Johnson, CEO of BioCrossroads, which operates a seed-stage fund for life sciences companies, said investors continue to be risk averse in that sector, but have become more optimistic recently, particularly for biotech and health information technology companies.

“In the past year to 18 months, the environment is more optimistic, people are willing to think about some longer-term risk,” Johnson said. “There is plenty of money, as you know, sitting on the sidelines and the feeling is that more of it is going to play.”

Johnson noted that early-stage life sciences firms in Indiana have increasingly turned to angel investors, and that not all of those deals may be reported to the National Venture Capital Association.

The only other company to raise a sizable amount of money last year was Indianapolis-based Courseload Inc., which makes software for using digital textbooks. It pulled in $5.2 million from angel investors and Indianapolis-based radio company Emmis Communications Corp.


  • More cheerleading
    Rah, Indy, Rah. Everybody wants to do deals here, right? I mean, we hav Angie's List, a business without a viable model and we have ExactTarget, a business that would have been cutting edge in 1997 but is now just sort of funny. Keep drinking the Kool Aid. I work downtown and there is no business community here. Strip away all the jobs that depend on tax subsidies and downtown is a ghost town. I know. I've worked the numbers. What has this silly little rah-rah rag done?

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I keep wondering why I keep hearing about this problem of corporations leaving America, and I never hear a reasonable proposal to lower corporate tax rates and raise personal rates on income from capital gains and dividends, especially for high earners. It is just too simple of a solution for Congress to embrace?

  2. Are you financially down and you need money to settle your dept,or you need money to start up a business or to invest on a huge business,we also offer Loans to individuals, Firms and cooperate bodies at low interest rate , loan terms determinant,Loan amount between the sum of $5,000.00 to $100,000,000.00. US Dollars And Euro. Loan for developing businesses a competitive edge/ business expansion. We Offer The Following Kinds Of Loans. Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Consolidation Loan FIRST INFORMATIONS NEEDED ARE: BORROWER’S DATA’S INFORMATION,FILL AND RETURN FOR QUICK START UP PROCESS. Name:_________ Last Name:_________ Age:_________ Contact Address:_________ Country:_________ Amount Needed as Loan:_________ Loan Duration:_________ Phone Number__________ Monthly Income/Yearly Income:_________ Purpose for Loan:_________ Occupation:_________ How Soon is Loan Needed__________ Email via: albertbrownfirm@outlook.com

  3. is a disaster. SR37 already needs to be built to interstate standards between 465 and SR144. Southport Road is a mess each morning and evening.

  4. Bass Pro Shops would be good for the mall as well as a Giant Eagle Market District or a Jungle Jim's International Market Place grocery store like the one near Cincinnati Ohio.A Disney quest indoor theme park would be good.An Academy outdoor store would be good too.Indoor Circus shows and magic shows would be good as well. A casino with sports bar would be good.A Disney theater inside that shows movies and Broadway shows would work.Nashville Tennessee concert shops with indoor neon lights would be good.How about a theater that shows travel shows and theme parks. A train store would be good.How about a giant toy store with high tech video games.

  5. This development is in addition to Allpoints Midwest 5, Aitrtek, a recent FedEx and more in Plainfield. Greenwood and Brownsburg also have similar projects.