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South Florida Q2 VC results are ugly, like the rest of the US. What were the top deals?

South Florida Q2 VC results are ugly, like the rest of the US. What were the top deals?

Ouch! We knew it was coming but it doesn’t make it any easier. Venture capital plunged in the first half in South Florida, as it did across the nation, according to the Q2 Pitchbook-NVCA Venture Monitor report released today. We have the results, as well as the top Q2 deals, according to Pitchbook, but first let’s look at the national trends.

The national picture

The first half of the year delivered more challenges to venture capital, according to the Q2 2023 Pitchbook-NVCA Venture Monitor report. US VC-backed companies raised $39.8 billion in Q2, a 48% decline year-over-year. Still, deal counts for seed and early-stage ventures were up. And with a longer lens, the situation looks less dire: US startups are on track to raise about the same amount as they did in 2020.

The usual players picked up the most VC, with the San Francisco Bay area tallying $16.1 billion across 567 deals, then New York ($4.8 billion), Boston ($4.5 billion), Los Angeles ($1.9 billion) and Washington, D.C. ($1.3 billion).

Valuations are tumbling, the report said. Through last year, early-stage valuations continued to grow, but they are now in retreat: the median early-stage valuation declined 20% this year to $39.8 million. At the seed stage, however, valuations are modestly higher than last year. The decline has been sharpest at the venture-growth stage, where the median pre-money valuation fell 62% YoY to roughly $126 million.

Few VC-backed companies have achieved notable exits so far this year, and at the current pace, exit value could be the lowest in a decade, Pitchbook said. The IPO market has yet to attract a significant tech listing, and acquisitions have been dampened by corporate cost-cutting and higher borrowing costs for leveraged buyouts.

US VC fundraising totaled just $33.3 billion in the first half of the year, on pace for the lowest annual total since 2017. Yet, an encouraging piece of data in the report was that more than two-thirds of that total was raised in Q2.

Looking ahead, quarterly capital raised by startups has been relatively steady for the past three quarters. Much depends on the revival of the exit environment and, by extension, the flow of capital back into new funds. Several generative AI startups have also been acquired in recent weeks: Databricks agreed to pay $1.3 billion for MosaicML, and Thomson Reuters inked a $650 million deal for legal AI startup Casetext.

The South Florida picture

What a difference a year makes. For Q2 2022, Pitchbook reported that the Miami-Fort Lauderdale metro pulled in $1.7 billion (recently revised) across 139 deals. Today, Pitchbook reported just $388.5 million across 77 deals flowed to South Florida companies in Q2, according to underlying data provided to Refresh Miami.

While venture reporting lags and those results will be revised, the early results are sobering: The results are down 77% in dollars and  45% in deal count from a year ago. One small bright spot: Funding was up from the $348 million (revised figure) logged in Q1, although the deal count was down.  

Given the recessionary economy and inflation trends, the FTX fallout and the SVB collapse, the downturn this year was expected, but still shocking, after the region pulled in record totals in 2021 and 2022. By my reporting, the metro area pulled in $5.8 billion in 2022, ranking 7th in the nation. Not this year.

According to Pitchbook’s data, here were the top deals by companies headquartered in the Miami metro area in Q2 that I could confirm at this time:

  • Digibee: The later-stage Weston-based low-code integration platform startup raised $60 million.
  • Betr: The early stage Miami-based sports-betting fintech raised $35 million on a valuation of $300 million.
  • MayMaan: The later-stage Hollywood-based cleantech technology company raised $30 million.
  • On.Energy: The later-stage Miami-based energy storage solutions startup raised $20 million.
  • Nsure.com: The later-stage insurtech company based in Boca Raton raised $14.5 million.
  • Flexbase: The early stage Miami construction-tech startup raised $12.7 million.
  • ESpace: The early stage telecom startup based in Miramar raised $10 million

Pitchbook recorded 1 exit for South Florida in Q2, but without a deal value. There were 4 exits in Q1, valued at $58.4 million.

Venture reporting lags and all of these figures will be revised over the months, but it provides a snapshot of where we are. I will be producing a comprehensive report for eMerge Americas in which I will be closely analyzing the data from all the venture data trackers and my own reporting. According to my preliminary research, there are already a  handful of deals Pitchbook did not include and my results will likely be higher, though not significantly. If trends hold, we will be on track for results closer to 2020.  

The Florida picture

Statewide, according to Pitchbook report, Florida companies drew $754.2 million across 118 deals in Q2 2023, up from a revised $625.8 million across 151 deals in Q1. But in Q2 2022, Florida companies took in nearly $2.3 billion across 204 deals.

South Florida companies drew roughly half of the state’s venture dollars in Q2 and two thirds of the deal count.

Top deals around the state included: Red 6 of Orlando, $70 million; Nymbus, now of Jacksonville, $70 million; and  Lemnature AquaFarm (Vero Beach), $58.5 million.  There were no exits in which deal values were disclosed, according to Pitchbook’s data.

Download the full report here.

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Follow Nancy Dahlberg on Twitter @ndahlberg and email her at ndahlbergbiz@gmail.com

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