U.S. startups raise record investment in 2020; here are the top Pacific Northwest deals in Q4

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When the pandemic hit the U.S. earlier this year and tech companies began laying off thousands of employees, analysts warned of a bumpy ride ahead for startups and venture capital investment.

To say the industry stabilized would be an understatement.

New Q4 numbers from the latest PitchBook-NVCA Venture Monitor show that U.S. startups broke another record in 2020, reeling in $156.2 billion, topping the previous mark set in 2018 ($142.7 billion) and last year’s total ($138.1 billion).

“Tragic as the pandemic has been, it has created a global need to re-think and re-set many practices and behaviors,” Joe Horowitz, managing general partner at Icon Ventures, said in a statement. “This has spurred significant demand for new innovative solutions and a digital acceleration, fueling the pace of venture capital investment.”

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There were also records set last year for capital raised by VC funds, and a near-record for VC-backed exit value with a strong IPO market. That should mean continued momentum heading into 2021 as investors have “dry powder” to put to work, said Bobby Franklin, president and CEO of NVCA.

Deal count dropped slightly year-over-year while a record 321 mega-deals ($100 million or more) closed in 2020. Angel and seed-stage financings remained stable year-over-year for both deal value and deal count, despite potential concern with trying to raise early-stage money over video chat.

“If investors continue to use teleconferencing software to source, diligence, and invest in nonlocal companies, a large amount of capital could be unlocked for businesses headquartered outside of traditional investment hubs,” PitchBook noted in its report.

(PitchBook/NVCA chart)

Venture capital investors sunk $946 billion across 54 deals in the Pacific Northwest during the fourth quarter, according to GeekWire’s tally, derived from our running list of Pacific Northwest startup investments. That follows $1.1 billion raised in the third quarter, and a strong first half of 2020 for Seattle and the broader Pacific Northwest startup ecosystem.

Funding totals from 2020 as a whole for the region came in at $4.4 billion, up 15% year-over-year.

The Pacific Northwest tech ecosystem continues to blossom, thanks to both fast-growing startups — including an increasing number of unicorns — as well as tech giants such as Amazon and Microsoft that have boomed during the pandemic as millions rely on their products and services.

Meanwhile, as the pandemic accelerates adoption of digital technology, the spotlight is shining brighter on the robust business-to-business technology ecosystem in the Seattle region amid the ongoing economic and health crisis.

That was reflected in the top 10 deals during Q4, as B2B startups such as Zenoti, Flexe, and Stackline made the list.

The biotech and pharma sector reached record levels nationally for deals and funding last year. That trend also showed up in the Pacific Northwest, as companies such as AbSci, Umoja Biopharma, and Inipharm landed big rounds.

Here’s a look at the top deals across the PNW in Q4:

Zenoti hits $1B valuation, raises $160M to build enterprise software for salons, spas, yoga studios

Virtual primary care startup 98point6 raises $118M as pandemic sparks demand for digital health tech

Seattle startup Flexe raises $70M as e-commerce rise fuels demand for flexible warehousing platform

Synthetic biology startup AbSci raises $65M to expand ‘Protein Printing’ tech

Seattle biotech firm Umoja Biopharma raises $53M as it tackles unique approach to immunotherapy

E-commerce intelligence platform Stackline raises $50M from Goldman Sachs as online retail booms

Former Zillow execs raise $40M seed round for Tomo Networks to reinvent how people buy homes

Silicon Valley mainstay NEA leads $37.5M investment in Seattle cloud startup Pulumi

Inipharm raises $35 million

Seattle startup Skilljar raises $33M as pandemic sparks demand for its customer education software

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