The coronavirus pandemic does not seem to have had much of an effect, if any, on Nebraska startup companies' prospects for raising money.
Fledgling firms in the state raised $106.7 million in venture capital last year, according to a report from Innosphere Ventures, a science and technology incubator program based in Fort Collins, Colorado.
That was a nearly 75% increase from 2019 and the third-most ever in a year. And it didn't even include a $120 million investment in Hudl, the sports video company, which was categorized as a private equity investment rather than a venture capital investment.
As good as the 2020 number was, it's already been surpassed in the first six months of this year, with Nebraska firms having raised $138.9 million, according to the report. Just $13 million more needs to be raised in the second half of the year to top 2018 for second place all-time. And the top year, 2015, certainly isn't out of reach. Companies would have to raise less than $60 million over the last six months of the year to beat the $196.2 million raised that year.
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"Nebraska has become an increasingly attractive spot for investors looking to invest in startup companies," said the report, which was authored by Innosphere Ventures' CEO and General Partner Mike Freeman, along with John Smith, another general partner.
The report said the state is ready for an increase in venture capital activity and startup growth, in large part due to public and private efforts to help accelerate the success of high-tech industries.
A big player in those efforts is Invest Nebraska, which the report noted is the single largest investor in Nebraska-based startups, with 84 companies in its active portfolio.
Dan Hoffman, CEO of the Lincoln-based nonprofit corporation that is a collaboration between the University of Nebraska, Nebraska Department of Economic Development and private investors, said it, too, has already invested more money this year: $2.7 million vs. $2.3 million in all of 2020.
"Venture capital investing during the 2020 pandemic revealed a cautious 'wait and see' approach by investors and entrepreneurs," Hoffman said in an email. "In 2021, venture capital investing is roaring back as more entrepreneurs start companies and investors view risk more favorably."
Matt Olberding's top Nebraska business stories of 2020
Top business stories: Virus toll on jobs
This was the first story I wrote that took a look at the economic toll the virus was taking on Lincoln.
Top business stories: Internet services strained
This was another story that looked at how COVID-19 had altered the working world in Lincoln.
Top business stories: Food supply breaks down
This is one of the most fascinating ag stories I’ve ever written, and it showed how one shock like COVID-19 can completely disrupt our food supply.
Top business stories: Downtown cubicles empty
This was a good, in-depth look at why downtown Lincoln remains relatively quiet.
Top business stories: Sign of the times
This was just a fun story that showed how one business saw huge demand during the pandemic.
Reach the writer at 402-473-2647 or molberding@journalstar.com.
On Twitter @LincolnBizBuzz.
Matt Olberding
Business reporter
Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.
