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Single investment boosts venture capital funding in Colorado Springs to 5-year high

January 10, 2018 Updated: January 10, 2018 at 11:05 am
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photo - A $50 million investment in Cherwell Software pushed last year to the best performance in five years for such investments. File photo.
A $50 million investment in Cherwell Software pushed last year to the best performance in five years for such investments. File photo. 

A $50 million investment in Cherwell Software in February was the only venture capital landed by a Colorado Springs company in 2017, but it still pushed last year to the best performance in five years for such investments, according to a quarterly report.

The $50 million total for 2017 was up from $1.2 million in 2016 and is the highest annual total since 2012, when venture capital funds pumped $51 million into Cherwell and two other companies.

Such funding jumped to a 16-year high statewide in 2017 and rose 17.2 percent nationwide.

Last year "was a year of records for the VC ecosystem in this millennium," said Tom Ciccolella, venture capital leader for PricewaterhouseCoopers, which sponsors the MoneyTree Report along with CB Insights. "In the U.S., we saw a record number of megarounds driving the third-highest level of investment in VC-backed startups."

Venture funding in Colorado last year surged 70.1 percent from 2016 to $1.17 billion, the highest annual total since $1.43 billion in 2001 and the fourth-highest since the MoneyTree Report was first compiled in 1995. Colorado startups finished the year strong with venture investments in the fourth quarter more than doubling from the fourth quarter of 2016 to $267.9 million. The fourth-quarter total was up nearly 40 percent from the previous quarter, with more than a fourth of the total going to Denver-based health care software startup WellTok.

"Overall, these funding levels continue to show the strength in Colorado's business environment, high-skilled workforce and innovation and entrepreneurship," said Rob Ward, a PricewaterhouseCoopers audit partner in Denver. Colorado ranked fifth among states in the number of venture capital transactions and 10th in the amount invested, he said.

Nationwide investments totaled $71.9 billion last year, the second-highest annual total since 2000 after 2015. The fourth-quarter total was up 45.3 percent from the fourth quarter of 2016 to $18.7 billion. The biggest deals in the fourth quarter included $1.5 billion invested in ride-sharing giant Lyft and two other deals topping $500 million to a Florida software company and a Virginia startup that plans to put more than 600 satellites into orbit to provide low-cost internet access worldwide.

"It was a record year for these megarounds and was driven by what we'd describe as the Softbank Effect. This is the entry of large, deep-pocketed investors, ranging from Softbank to sovereign wealth funds from around the globe investing in insurgent startup companies," said Anand Sanwal, CEO and co-founder of CB Insights.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

Facebook Wayne Heilman

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