2020 a big year for Conn. startups
State recorded among its best years for venture capital despite pandemic
In a way, The Feel Good Lab’s November filing summed up 2020 for many businesses.
The company reported to regulators zero dollars against a $200,000 target — not a lot of feel-good vibes to go around during the pandemic, after all.
But the New Haven pain relief developer is now in the process of raising nearly $1 million, one of many Connecticut businesses raising money after a year in which venture capitalists poured more money into the startup sector than in any other during the most recent economic expansion.
Growth-stage companies in Connecticut reported nearly $500 million in funds raised to the U.S. Securities & Exchange Commission last year, a 7 percent lift from 2019 despite the economic uncertainties of the COVID-19 pandemic. Startups socked away more than half that amount in the second quarter alone after New Haven biopharmaceutical company Rallybio’s mammoth funding round, according to SEC filings reported by privately held operating companies tracked by Hearst Connect“The icut Media.
Aiming for the long-shot payday of an Alexion Pharmaceuticals — a developer of treatments for rare diseases acquired last year for $40 billion by AstraZeneca — venture funds help fuel product development and hiring across industries. That includes consumer product companies like Athletic Brewing in Stratford, whose non-alcoholic beer was named best in the world last year — just three years after its formation.
Last October, Point Pickup Technologies booked one of the largest deals of the year in reporting $31.5 million in fresh funding to the SEC. The company’s platform helps companies secure delivery drivers for e-commerce fulfillment. CEO Tom Fiorita said Point Pickup has upped hiring to a rate of 20 jobs a week of late, mostly at its new Stamford headquarters as it pushes its workforce to nearly 200 people as of mid-January.
It did not hurt that several “gig economy” companies laid plans for initial public offerings of stock during the pandemic — the other major “exit” sought by investors in addition to acquisitions — notably DoorDash and Airbnb.
benefit we had, to be quite frank, was being in an industry [at] the top of the newspaper every day — the delivery business,” Fiorita said. “We certainly had attention from quite a few investors . ... To this day, there’s a lot of inbound, unsolicited requests to meet.”
Launched originally in Farmington and now based
in New Haven, Rallybio accounted for nearly 30 percent of the Connecticut totals last year, reporting a $145 million package in May. Like Alexion, where Rallybio CEO Martin Mackay worked previously, the company is developing treatments for rare ailments starting with a condition that can cause hemorrhages in newborn infants and fetuses.
Between early January (when Athletic Brewing beat all startups off the mark with a $6.6 million tranche) and the end of December (when New Haven-based Cybrexa Therapeutics registered nearly $15 million from investors in support of a cancer therapy it is developing) about 80 other Connecticut startups reported funding to the SEC, in line with the 2019 total.
Stamford had the biggest concentration of startups in that cohort with 15. That includes New Wave Foods, which pulled in more than $18 million as it develops a plant-based substitute for shrimp amid a continuing boom for culinary protein alternatives.
New Haven was next with a dozen more besides Rallybio and Cybrexa registering funding. But deals spanned the state, from Greenwich-based Woolloomooloo Shoe selling footwear designed with merino wool to Groton’s Atrocyte Pharmaceuticals developing a pill to treat concussions.
Still, experts said during an economic summit hosted last week by the Connecticut Business & Industry Association that state can do far more to nurture startups, including those that promise big-bang growth like Stamford-based biotech firm Springworks Therapeutics or Norwalk-based data backup and security company Datto. Springworks raised nearly $290 million through an October sale of stock on the heels of a 2019 IPO, while Datto landed $594 million the same week in its own IPO.
“After [General Electric] left a few years ago, we all recognized that we need to create our next GE here at home,” said Wes Bemus, executive director of the StamfordNext startup accelerator, one of four to receive state backing under CTNext’s fledgling Innovation Places program alongside programs in New Haven, Hartford and New London. “I’ve been working with entrepreneurs in the community all the way through the pandemic, and really what they’ve seen it as is an opportunity to come up with new ideas and pivot their businesses for the new reality we are living in . ... They’ve reacted to the times.”