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Venture capital took a nosedive in Q1. Here’s how the Miami metro area fared and the top deals

Nancy Dahlberg
Nancy Dahlberg
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By Nancy Dahlberg

It’s not a pretty picture: Nationally, venture capital funding took a nosedive in Q1, particularly in dollar value. Along with that, valuations fell, fundraising suffered and exits collapsed. The fast-growing Miami metro was not immune to the fallout, according to the Venture Monitor report by the National Venture Capital Association and Pitchbook released today.

The national picture

Nationally, venture capital has fallen since Q4 2021 overall – and in Q1 2023 stood at $37 billion across 2,856 deals. That was largely driven by a decline in late-stage venture, with Q1 producing just 19 mega-rounds, compared with 98 in Q1 2022. Yet, VC activity dropped in all stages and sectors in the first quarter of 2023, the report said. Still king, the Bay area (San Francisco to San Jose) brought in more than $15 billion in venture capital dollars across 915 deals.

Nationally, there was a noticeable drop in angel and seed-stage venture funding, to just 34 % of the deals in Q1. Early-stage deal sizes also tumbled, with the median deal size in Q1 falling to $6.2 million, a 29.1% descent from 2022’s full-year median of $8.8 million.

VC investments have fallen consistently over the past year as the market further condenses from the expansion of 2021, according to the Q1 2023 Venture Monitor.

Just $5.8 billion in exit value was closed in Q1, less than 1% of the total exit value generated in the record year of 2021. With IPOs practically unattainable in this environment, pressure continues to build within the industry, given the high number of unicorns unable to realize returns for investors, the report said.

The local picture

What a difference a year makes. A year ago at this time, Pitchbook reported that the Miami-Fort Lauderdale metro pulled in $1.33 billion across 90 deals in Q1 2022. Today, Pitchbook reported just $291.9 million across 72 deals flowed to South Florida companies in Q1. That figure is down from a sobering $513.8 million across 84 deals in a recently revised number for Q4 2022, which nonetheless closed out a record year for South Florida VC.

Given the recessionary economy and inflation trends, the FTX fallout and the SVB collapse, this Q1 nosedive 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. The Washington Post reported this week that the Miami-Fort Lauderdale metro was the fastest growing metro area in the country for venture activity from the start of 2020 through 2022, by both percentage growth of VC dollars and deals, based on Pitchbook data.

Crunchbase data shows that the Miami-Fort Lauderdale metro area companies pulled in $336 million across 81 deals in Q1, using similar criteria as Pitchbook, but using either service, it’s a large tumble. Venture reporting lags and all of these figures will be revised over the months, but it provides a snapshot of where we are. At the midyear, I will be producing a comprehensive report, and more closely evaluating the data from all the venture data trackers and my own reporting.

Here were the top deals in the Miami metro area in Q1, according to Pitchbook’s data:

  • QuickNode: The blockchain startup raised in $60 million. QuickNode was also the top deal in the state.
  • Cast AI: The cloud software startup raised $20 million.
  • Roami: The real estate technology startup raised $14 million.
  • Payabli: The cross payments fintech raised $12 million.
  • Knack: The educational software startup, raised $11 million.
  • Marco, the specialized  finance fintech, raised $8 million.
  • Sortium, a gaming software company, raised 8 million.
  • Turntable, an audiotech software company, raised $7 million.
  • Care Angel, a healthcare technology company, raised $7 million.
  • Odyssey Elixir, a beverage manufacturer, raised $6 million.

Pitchbook noted that Miami’s ecosystem doubled its annual deal count in three years, from 2019 through 2022. Deal count remains strong, the report noted, surpassing Seattle and nearly matching Washington DC’s count, which has double the commitments and nearly double the funds over time. By deal count, the Miami-Fort Lauderdale metro area ranked 9th among major metros in the US, but by deal value it fell to 16th among metro areas, according to Pitchbook’s data.

Pitchbook recorded four exits valued at $59 million in Q1. The largest reported by Pitchbook was by Miami-based MGO Global, an $8 million exit.

The Florida picture

Statewide, according to Pitchbook report, Florida companies drew $518 million across 119 deals in Q1 2023, down from a revised $926.11 million in Q4 2022. South Florida drew 56% of the state’s venture dollars and 59% of the deals in Q1 2023.

Top deals around the state included: Lemnature AquaFi (Space Coast), $51 million; Clearsense (Jacksonville), $50 million; Janus Health (Naples), $45 million; and Mad Mobile (Tampa), $20 million. All of the exits in which the deal values were disclosed were in South Florida, according to Pitchbook’s data.

Source: Pitchbook-NVCA Q1 2023 Venture Monitor report. Figures are rounded.

UPDATE: After checking into some conflicting data, I revised the Q1 total for the Miami-Fort Lauderdale metro area to $291.9 million, based on an April 14 Pitchbook data run.

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

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