State’s startups hit best venture totals in 5 years
From Athletic Brewing to Zorus, Connecticut startups had a boom year over the span of 2019 in landing outside funding as they conceptualized and delivered business plans with the goal of becoming job engines down the road.
Investors doubled the aggregate cash they funneled into Connecticut startups in 2019, Securities & Exchange Commission filings show, with the surge driven by a $125 million financing round by Stamfordbased Springworks Therapeutics.
Businesses file notification with the SEC for venture money they raise from outside investors, with funds used to pay employees, hire new ones and foot the cost of developing new products and services and sales channels. Connecticut has been working for years to increase both the number of startups with growth potential within its borders, as well as a cadre of investors to keep them afloat until they can generate sustainable revenue.
Last year, Connecticut slashed the investment threshold at which socalled “angel” investors can claim a credit on state taxes against investments in qualifying
startups. Between July and September alone, nearly 50 investors claimed the credit on $4.7 million in aggregate investment in 11 companies according to Connecticut Innovations, a statebacked venture fund with a New Haven office.
This year, the state authorized Connecticut Innovations and subsidiary CTNext to invest up to $10 million supporting startups’ efforts to prove their concepts along the path to commercialization.
“The state’s deal flow is way up,” McCooe said. “The overall number of companies .... Connecticut is getting looks at has gone up fivefold.”
Zorus kicked off 2019 with a $400,000 tranche as the Monroebased startup developed a suite of cloudbased security applications, with founder Greg Gage previously a director of development for Norwalkbased Datto, among the fastest growing companies in the state of the past decade offering data backup services.
Branfordbased Propria snuck in the final notification of the year, with CEO Stephanie Jacoby’s LinkedIn page describing the stealthmode startup as working on “fully functional, machinereadable engineered heart tissue” with no additional details provided.
In between, more than 75 Connecticut companies reported raising $458 million, the highest dollar figure since 2014. While the number of businesses reporting funding stayed flat from a year earlier, there were twice as many reporting at least $10 million in new venture capital.
Woodbridgebased P2 Science generated the highest tally in western Connecticut of the fourth quarter, at more than $15 million. In the back half of 2018, P2 opened in Naugatuck what it called the first plant of its kind deriving chemicals from vegetable oil for use in flavor ingredients, cosmetics and fragrances.
The only company reporting a higher total was In Vitro Sciences of Avon, which registered $31.5 million as it offers fertility clinics like Reproductive Medicine Associates of Connecticut a range of services to connect with patients, manage their cases and file claims for insurance coverage.
Five more companies reported raising amounts between $2 million and $5 million in the fourth quarter, including Stratfordbased Athletic Brewing which has a line of alcoholfree craft beers. Also in that number was Convexity Scientific of Fairfield, developer of a handheld nebulizer for people to take treatments for asthma or chronic obstructive pulmonary disease; and Valisure, an online pharmacy operating in New Haven that screens medications using chemical analysis to weed out any bad batches.