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VC investment surpasses $1B in 2021

Ting Gootee is the chief investment officer for Elevate Ventures. (photo courtesy of AgriNovus Indiana)

INDIANAPOLIS (Inside INdiana Business) — For the first time, Indiana has topped $1 billion in venture capital investment. The 2021 Indiana Venture Report from Indianapolis-based Elevate Ventures says the state saw 159 deals totaling $1.4 billion last year, which is a 186% increase over 2020 and exceeds the total amount invested in 2019 and 2020 combined. Ting Gootee, chief investment officer for Elevate Ventures, says the numbers are the result of more capital being available and a growing number of late-stage deals that bring more dollars.

In an interview with Inside INdiana Business, Gootee said Indiana’s startup ecosystem is evolving to bring in more big number deals.

“The thing we’ve been tracking and keeping a close eye on for a number of years now is the importance of having more Indiana startups not only started and getting seed funded and developed, but we want to see more growing into scale-up stage companies that can attract a big amount of venture capital dollars,” said Gootee. “Those mega rounds really contributed this year; we happened to have a handful of those really contribute to last year’s venture dollar growth in a significant way.”

While the majority of the deals generated in 2021 were pre-seed deals below $500,000, Indiana did see an increase in late-stage deals of more than $10 million with 17, compared to 14 in 2020.

Some of the five “mega-round” deals highlighted in the report include Formstack’s $425 million investment announced in November, as well as Greenlight Guru’s $120 million investment and $100 million for Passageways’ Indy-based subsidiary OnBoard.

“That says our ecosystem is more maturing or developing,” Gootee said. “Because of the number of mega rounds that we’re able to see, correlating with the number of exits we’ve seen the last decade or so, we’re becoming hopefully not just emerging market, but a market that’s developing into a more robust and mature venture ecosystem here.”

According to the report, more than 65% of venture capital dollars were invested in business-to-business tech companies with 88 deals totaling more than $930 million. However, life sciences and agbioscience companies accounted for 34 deals totaling more than $340 million.

Additionally, nearly half of the 10 largest deals were closed in the West Central region of Indiana, which saw venture activity rise 300% compared to the previous year. Only the Central region had a higher number.

“There are key pieces of venture assets, including capital, talent, technology and the whole ecosystem support system that are developing robustly around different regions,” said Gootee. “Not to anyone’s surprise, those tend to be hovered around the innovation centers we’ve already seen through the university ecosystem. Our university partners have a large role to play and they continue to add a lot of value in terms of generating startup activities, as well as attracting bigger enterprises and more mature companies and providing that crucial connectivity piece.”

Gootee says while the state has built a strong foundation, the market remains very robust with a lot of capital available for investment opportunities, which could put Indiana on par to meet or exceed 2021 numbers this year.

You can connect to the full report by clicking here.