Minnesota #1 State for Venture Capital Market Share Growth

April 18  

Minnesota jumped 13 spots to the 15th best market for venture capital in the United States in 2017 according to a report from Chartio. This happened while states like Colorado, Tennessee, Texas, and Illinois lost market share. California retains the top spot, though its lead is slipping as investors tap into booming startup hubs around the country.

“While Florida and Virginia were massive jumps, they weren’t the biggest.  That honor belongs to the great State of Minnesota. Minnesota jumped 13 places from 28th to 15th place, led by Minneapolis, Plymouth, Minnetonka, and Rochester in 2017.” Writes Tim Miller, in Chartio’s breakdown of the changing investment landscape.

Medical Alley contributed $735 million to the state’s total, estimated to be over $1 billion. Large raises like Bright Health’s $160 million and Metavention’s $65 million made a large impact in the total funds raised, but so did the dozens of raises in the $1 million to $10 million bracket. Companies that are addressing the biggest healthcare challenges and know how to build a business — the kind Medical Alley is known for producing — are winning the day.

This follows a 10-year trend of increasing healthcare investment in Medical Alley. The great recession of 2008, combined with uncertainty at the FDA and around healthcare reform, created the “perfect storm” as NEA’s Josh Makower termed it. Coming out of the recession, investment steadily increased in the state’s leading medical device sector.

But then something else happened: Digital health and biopharma companies emerged, raising major rounds and adding a second and third leg to Medical Alley’s health innovation ecosystem.

2018 has started strong signaling that absolute growth is likely to continue, which could drive further increases in market share. Bind raised $60 million, Rebiotix had an exit to Ferring Pharmaceuticals, and dozens of device, digital, and drug firms have told Medical Alley Association staff they are in various stages of raising new rounds.

2017 saw Minnesota go from 28th to 15th in the country. Is 2018 the year we crack the top 10?

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