Young Wisconsin companies drew at least $209.5 million from investors in 2015, a sharp drop from the $346 million raised by early-stage companies in 2014, a report by the Wisconsin Technology Council says.
But the money was spread over a larger number of startups in 2015. And the 2014 figures are skewed by one huge investment: $127.4 million to SHINE Medical Technologies in debt financing, which often involves borrowing money that might later be converted to stock ownership.
SHINE, of Monona, is building a plant in Janesville to make a key medical isotope used in diagnostic tests.
The 2016 Wisconsin Portfolio, compiled by the Tech Council’s Wisconsin Angel Network, says at least 128 Wisconsin companies raised money from venture capital groups and individual angel investors last year, up from 113 in 2014. The results are based on data disclosed in public announcements, regulatory filings and a survey of investor groups. Angel networks declined to participate.
Tom Still, president of the Tech Council, said the dip in total funding is not a reason for concern.
“Angel and venture capital, as a class, is pretty lumpy,” Still said. “There are some natural peaks and valleys. Sometimes, it has to do with when the deals are completed at year-end and reported to the U.S. Securities and Exchange Commission.”
Wisconsin companies that scored the three biggest deals in 2015 were all from Madison: ablation device maker NeuWave Medical, $25 million; mobile restaurant meal ordering EatStreet, $15 million; and influenza vaccine developer Flugen, $12 million.
Other key survey results:
- The number of $1 million-plus deals continues to rise: 27 in 2013; 38 in 2014; 46 in 2015.
- Women-led companies made up 14 percent of the startups that landed investments in 2015.
- Out-of-state investors took part in at least 20 percent of the investments charted in 2015.
“Getting out the word about what Wisconsin has (to offer) has been a slow but steady process and I think it’s starting to pay some results,” Still said.
Still said there are encouraging trends — more companies getting some amount of funding, and more at the million-dollar level; more investors taking advantage of tax credits; and deals in diverse industry sectors.
And 2016 could be better. Through the end of May, 39 deals have been made public worth a total of $135 million.
“I think all of that, together, suggests Wisconsin generally remains on an uphill climb,” Still said.
Nationwide, young companies received about $59 billion in venture capital in 2015 — the second highest year on record, according to the National Venture Capital Association’s annual Yearbook.
The UW-Madison’s Discovery to Product accelerator program has graduated its second group of companies, featuring campus research that ranged from growing brain cells to enhancing virtual reality offerings.
Seven early-stage companies mentored through D2P are:
- BiopsyAssure: A more precise test for prostate cancer that can diagnose the disease from any prostate cell, being developed by David Jarrard in the Department of Urology.
- BrainXell: Growing several types of neural cells to use for drug testing and basic biology, based on the work of Waisman Center scientific director Su-Chun Zhang.
- Calimetrix: Devices that can uniformly calibrate specific types of measurements of soft tissues seen through magnetic resonance imaging. Formed by radiology professor Scott Reeder and senior scientist Jean Brittain, Calimetrix says its devices could, for example, replace an invasive biopsy to detect fatty liver disease.
- Holos: A personalized, interactive virtual reality home page and content portal, developed by recent UW-Madison graduates Dan Borkus and Tyler Waite.
- KIINCE: A prototype machine that can provide personalized training to help a stroke victim’s walking improve, by associate professor of kinesiology Kreg Gruben.
- Wonder [VR] Studio: Beautiful and relaxing virtual reality environments, by Lisa Frank, a lecturer in design studies with a UW-Madison master’s degree in fine arts.
- Xemex: An adhesive mixing nozzle with no moving parts for use by industries such as electronic and automotive, developed by recent graduates Eric Ronning and Brian Pekron.
A partnership between the UW-Madison and the Wisconsin Alumni Research Foundation, D2P offers customized, one-on-one support “to do what is needed to mature the project and get it ready for funding,” director John Biondi said.