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Venture capital funding stays slow and steady for Tampa Bay area, Florida startups

Dr. Bill Kerr serves as CEO of the Tampa startup company Avalon Healthcare Solutions, which helps control the costs of diagnostic lab tests. Avalon received nearly $30 million in venture capital funding in the first quarter of 2017. [Handout photo]

Dr. Bill Kerr serves as CEO of the Tampa startup company Avalon Healthcare Solutions, which helps control the costs of diagnostic lab tests. Avalon received nearly $30 million in venture capital funding in the first quarter of 2017. [Handout photo]

The Tampa Bay metro market was home to 14 venture capital deals worth a combined $54.6 million, part of a VC funding effort statewide that backed 63 deals totaling $244.2 million in the first quarter of 2017.

The deals and the funding amounts continue to typify Florida and Tampa Bay's modest standing in venture capital activity in the country. Led by $8.3 billion in quarterly venture capital funding in California — the VC epicenter of this country and planet — Florida ranked 11th among states in total venture capital funding. And Tampa Bay landed at No. 20 among major metro areas based on VC funding amounts.

To appreciate the profound difference in funding scale, the San Francisco metro area alone attracted $5.1 billion in the first quarter. That's about 20 times the size of funding received in all Florida deals in the quarter. And it's nearly 95 times the size of Tampa Bay's funding in the first three months of this year, according to fresh data released Tuesday by Pitchbook and the National Venture Capital Association.

In the first quarter, Tampa's Avalon Healthcare Solutions, run by CEO Dr. Bill Kerr, received the largest VC funding commitment of just under $30 million in the bay area. The clinical and information technology company helps physicians, consumers and payers better manage the use of thousands of diagnostic laboratory tests.

Overall, the survey found that in the first quarter of this year, investors nationally deployed $16.5 billion to 1,797 venture-backed startups. The marked a slight uptick in capital invested over the fourth quarter of 2016, but the fewest companies to receive investment since the fourth quarter of 2011.

"After several consecutive years of elevated U.S. venture activity, it seems the industry is finally coming back down to earth," said Pitchbook CEO John Gabbert.

However, the survey added, the first three months of the year brought headlines for some prominent venture-backed exits, notably the initial public offering or IPO of Snapchat's Snap, Inc.

In Florida, several events suggested improving trends for startups seeking VC funding. First, a direct nonstop flight to San Francisco began operating out of Tampa International Airport, suggesting VC investors in California and Tampa Bay startups will find it easier to get to know each other in the future.

In addition, affluent Florida investors are becoming more active as "angel investors" in funding area startups. Such organizations as Florida Funders in Tampa and TiE Tampa Bay are also gaining higher profiles as area investors. And both Tampa Bay WaVE and the University of South Florida are taking steps to start seed capital funds to assist startups.

By the numbers: Florida venture capital

In first quarter 2017

Total Florida VC funding: $244.2 million in 63 deals

Total Tampa Bay VC funding: $54.6 million in 14 deals

Biggest Florida deal: Altor Bioscience (Miramar), $30.1 million

Biggest Tampa Bay deal: Avalon Healthcare Solutions, $29.3 million

Biggest U.S. deal: Airbnb (San Francisco), $1 billion

Source: Pitchbook—National Venture Capital Association "Venture Monitor"

Venture capital funding stays slow and steady for Tampa Bay area, Florida startups 04/05/17 [Last modified: Tuesday, April 4, 2017 5:17pm]
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