Two big deals propelled venture capital funding in the Colorado Springs area to a record $197 million last year as state and national numbers hit their highest levels since the early 2000s, according to a report released Monday.
A $172 million investment in Colorado Springs-based Cherwell Software by private equity giant KKR and a $25 million investment in Monument-based software developer Quantum Metric by Insight Venture Partners were the only two local venture deals completed last year. The two deals easily surpassed the record $179.1 million invested in Springs area startups in 2000, according to the quarterly MoneyTree Report.
The 2018 total would have been even higher if the report had included the $8.6 million invested in January 2018 in Colorado Springs-based FoodMaven by members of the Walton family — founders of Walmart — and other investors. The 2018 total was nearly four times the $50 million invested locally in 2017; the entire sum went to Cherwell and came from KKR. There were no local venture deals in the final quarter of 2018.
Colorado venture investments jumped 23 percent from 2017 to $1.47 billion last year, the most landed by the state’s startups since they received $1.53 billion in 2001, despite the number of deals declining by 10 during the same period. The $243.7 million invested in Colorado startups during the fourth quarter was up 8.5 percent from the final quarter of 2017 and the smallest quarterly total in a year.
“Last year was a very strong year, even with a declining number of deals that is consistent with the national trend of fewer, bigger deals,” said Eric Hornsten, a San Diego-based partner in the deals, merger and acquisition practice of PricewaterhouseCoopers, cosponsor of the report with CB Insights.
“Strong exit activity through acquisitions and initial public offerings continues to bode well for the future funding environment.”
Nationwide venture investments last year were up 30 percent from 2017, to $99.5 billion, the highest annual total since such funding totaled nearly $120 billion in 2000. However, deals in last year’s final quarter fell 10.7 percent to $25 billion despite a $1.25 billion deal with North Carolina-based Epic Games and a $1.1 billion deal with California-based View, which makes specially coated glass that can change tint levels.
Last year “was a phenomenal year for U.S. venture capital,” said Tom Ciccolella, venture capital leader for PricewaterhouseCoopers. “There certainly continues to be a healthy availability of funds and appetite for investment, while the trend of fewer, bigger deals persists.”