Wisconsin 2013 VC Activity Drops, Shifts to Software from Biotech

Wisconsin venture capital activity in 2013 appeared to be a mixed bag, as deal flow was up year-over-year, but the amount invested shrank by more than half, according to the quarterly MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association.

Wisconsin saw $35.9 million invested in 19 deals last year, compared with $95.3 million in 14 deals in 2012. The report, released Friday, uses Thomson Reuters data compiled from a survey of VC firms nationwide.

Last year’s investment total marked the lowest for Wisconsin since 1996. Even 2009—the worst of the great recession—saw slightly more investments, with $36.1 million in 15 deals that year, according to MoneyTree data.

But the 2013 numbers shouldn’t necessarily be cause for alarm, industry observers said.

“Numbers year to year in Wisconsin’s early-stage environment tend to fluctuate and can be lumpy based on large raise amounts by certain companies,” said Dan Blake, executive director of the Wisconsin Angel Network, an arm of the Wisconsin Technology Council in Madison that tracks angel and VC investments in the state. Basically, the totals are so small that just one or two deals can skew them significantly.

Blake pointed out that 2012 saw Cellular Dynamics International, CalStar Products, and Connecture each raise about $20 million—making up about two-thirds of that year’s total VC investments in Wisconsin, per MoneyTree data.

In 2010, Virent raised $46.4 million, a significant chunk of the $134.9 million MoneyTree said was raised in Wisconsin that year.

No Wisconsin company raised more than $10 million in 2013, according to MoneyTree. The top three Wisconsin investments last year were:

• StudyBlue, a Madison-based online and mobile study platform that raised $9.3 million from Great Oaks Venture Capital, a New York-based VC, and other investors.

Propeller Health, a Madison-based digital tracker for asthma and chronic obstructive pulmonary disease, which raised nearly $7 million from The Social+Capital Partnership of Palo Alto, CA, and other investors.

• Montage Talent, a Delafield, WI-based provider of video interviewing products and enterprise software, which raised $4 million from Baird Capital Partners; Madison-based Calumet Venture Fund; Gary Comer Inc. of Waukesha, WI; the State of Wisconsin Investment Board; and others.

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