Miami Tech & Startup News

The Miami Movement fuels Q2 venture capital. South Florida VC rockets 271%, and we've got the top deals

The Miami Movement fuels Q2 venture capital. South Florida VC rockets 271%, and we’ve got the top deals

Is the Miami Moment-turned-Movement beginning to run up South Florida’s venture capital numbers? With prominent funders like SoftBank, Founders Fund and Tiger Global finding deals in the region and dozens of venture-backed startups relocating from the Valley and New York in the last six months, is Miami Mayor Francis Suarez’s Capital of Capital beginning to bear fruit? It’s way too early to call it a trend, but at least in the second quarter, yes, it is. Overall, Q2 capital raises at the Series A and higher stages were on average getting larger, and new Miami companies grabbed a good portion of the venture dollars.

Venture capital investments in South Florida rocketed higher in the second quarter. In the Miami-Fort Lauderdale metro area, companies raised $831.4 million, a 271% increase in dollar value over the first quarter, according to  the Q2  Venture Monitor report produced by the National Venture Capital Association and PitchBook. Yet, that Q2 haul was across 50 deals, down from 52 in Q1. 

The Miami Movement effect: Two of the quarter’s largest deals were new-to-Miami companies Pipe and Introhive, which together raised $350 million of that Q2 total. Also, Series A and later-stage deals were larger compared to past years, some of them powered by high profile VC funds. What’s more, South Florida’s largest angel network, the Miami Angels has experienced a surge in new membership and is putting more money to work. We’ll be watching to see if this momentum continues.

For the half, according to Pitchbook’s data, the Miami-Fort Lauderdale metro area attracted $1.06 billion, across 102 deals, powered largely by the Q2 acceleration. If the trend continues, the total could surpass last year’s total of $2.27 billion, part of a record-setting three-year run that brought in $6.5 billion in 2018 through 2020, according to my analysis for eMerge Americas.

Worth noting: In the first half of 2021, there were no single deals in the $500 million to $1 billion range; in each of the last three years and in several other preceding years, we have had at least one company – most recently REEF and before that Magic Leap – that attracted one of those outsized deals each year, skewing the South Florida results.

Miami’s fund-raising success, compared to the region’s historical trends, is pulling up the state. In the second quarter, companies in Florida attracted $1.01 billion, double the first quarter’s total of $498.2 million, according to Pitchbook. The number of deals fell, from 110 in Q1 to 90 in Q2.

South Florida companies reaped 83% of the investment dollars in the state in Q2, according to the Venture Monitor. In the first half of 2021, $1.5 billion poured into the state as a whole, and 67% of that went to companies in the Miami metro area.

Q4 top deals in South Florida

Here are the South Florida startups that raised the most funding in Q2, according to Pitchbook:

  • Pipe, fintech, strategic round, Miami: $250 million
  • PayCargo, fintech, Series B, Coral Gables: $125 million
  • Introhive, CRM, Series C, MIami, $100 million
  • Material Bank, marketplace, Series C, Boca Raton: $100 million
  • Papa, healthtech/elder care, Series C, Miami: $60 million
  • Heru, medtech, Series A, Miami: $30 million
  • Honorlock, edtech, Series B, Boca Raton: $25 million
  • Nymbus, fintech, later stage, Miami Beach: $20 million
  • RapidPulse, medtech, Series A, Miami: $15 million
  • TissueTech, medtech, later stage, Miami: $15 million

Note: Securitize’s $48 million raise and the  $40.7 million round into Novo – two more fintech deals – should also be on this list. I will include them it in my own upcoming report.

In coming weeks, I will again be compiling the mid-year report for eMerge Americas and looking much more deeply at the Miami metro data for trends in sectors, stages, comparisons and pivotal moments  (download the 2020 report here). My aim is to try to present a complete picture of the Florida and South Florida venture landscape, which I have been tracking as a business journalist since 2011. My numbers will be a little higher because it will include rounds like Securitize, backed by Morgan Stanley, and ShipMonk’s $65 million private equity raise in Q1. Stay tuned!

To be sure, Miami’s slice of the venture capital pie is still tiny, with the big three tech hubs – Silicon Valley, New York and Boston – drawing nearly two-thirds of the money. It’s also young, with more than half of the deals at the angel and seed stages.  In Q2, the Miami metro area accounted for 1% of the US venture capital activity, which brings us to the national picture.

Nationally, up, up and away

U.S. venture capital activity was up across all phases of the ecosystem in the first half of the year, according to the PitchBook-NVCA Venture Monitor. VC deal activity reached $75 billion invested across an estimated 4,302 deals in the second quarter, bringing the first half total to $150 billion across 8,406 deals.

The Q2 findings showed that  deal-making in angel, seed and early-stage VC financings catapulted to record highs, and is already near shattering the 2020 record, the report said. The total capital available to VC-backed companies will likely continue to swell through the end of 2021, especially at the late stage, the report said. The exit market was also extremely robust as outsized exits propelled most of the capital distributions and IPOs remained the main route to liquidity for the largest VC-backed startups.

“U.S. venture investment levels continue to rise as mega-deals become more common and nontraditional investor participation in VC becomes standard. As the industry looks toward the second half of the year, investors are evaluating whether this level of deal-making will persist and what its broader impact might be,” said John Gabbert, founder and CEO of PitchBook, in a statement. “The robust exit market of the last 24 months has returned record amounts of liquidity to LPs and more exits happening across the VC ecosystem is a broadly optimistic sign for the health of the venture market going forward.”

Download the Q2 Venture Monitor here.

Follow @ndahlberg on Twitter and email her at [email protected]

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