Utah ranks 9th in venture capital average deal value in Q4 2016

In Q4 2016, Utah ranked 9th in Venture Capital per deal value. The amount of Utah Venture Capital invested has greatly increased over the past decade, providing opportunities for Utah startups to thrive. (PwC/CB MoneyTree)
In Q4 2016, Utah ranked 9th in venture capital per deal value. The amount of Utah venture capital invested has greatly increased over the past decade, providing opportunities for Utah startups to thrive. (PwC/CB MoneyTree)

 

 

Utah ranked 9th in venture capital per deal value nationally, according to PwC Money Tree Report.  

Venture capital is a type of financing provided to companies in the early stages of development. Venture capitalists invest in companies in exchange for a share of ownership.

Utah companies raised $170 million of venture capital in Q4 of 2016 across just 19 deals, which translates to an average of $8.9 million per deal.

“The companies that we’ve seen coming out of Utah and surrounding states are phenomenal,” said Kickstart Seed Fund Analyst Minna Wang. “Quantity — and more importantly, quality — have gone up year after year.”

For example, Lucid Software — the maker of LucidChart and LucidPress — is one Utah company that has risen to great heights since closing a $5 million round of funding in May 2014. Kickstart Seed Fund was one of the VC groups that invested in Lucid, and Wang said the company continues to exceed expectations.

Although venture capital in Utah was down roughly $350 million in 2016 from the $983 million invested in 2015, it still sizes up well to other states.

Utah ranks 17th among the top 20 states based on total dollars invested in the past 20 years, according to another PwC report.

Utah ranks 17th among all states in total dollars invested in the last 20 years. In the past decade, Utah would have ranked even higher. (PwC/CB MoneyTree)
Utah ranks 17th among all states in total dollars invested in the last 20 years. In the past decade, Utah would have ranked even higher. (PwC/CB MoneyTree)

BYU-run Cougar Capital founder and faculty advisor Gary Williams agreed that investing opportunities in Utah are improving, especially along the Wasatch Front.

“Valuations have been increasing over the past couple of years, but so has the amount of capital available for investment,” Williams said. “The best deals are typically ‘oversubscribed,’ with more firms wanting to invest than there is need for their capital.”

Some of these best deals mentioned by Williams may include companies such as Qualtrics, which raised $150 million raised in 2014; InsideSales, which raised $60 million in 2015; Domo, which raised $200 million in 2015; and Finicity, which raised $42 million in 2016.

Because venture capital isn’t as abundant in Utah as it is in a region like Silicon Valley, Finicity President and co-founder Nick Thomas said investors in Utah can be more cautious with their money.

“Investors in Utah are more selective and focus on companies with established market and a clear path to profitability,” Thomas said. “However, the region has very good investors and has put our ‘Silicon Slopes’ region on the map.”

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