VC Investment in Seattle Companies Up 27 Percent in First Half

[Updated 7/11/17, 2:47 p.m. See below.] Seattle companies raised $803 million in venture capital during the first half of 2017, a 27 percent increase over the first six months of 2016, according to data the Venture Monitor report from Seattle-based PitchBook and the National Venture Capital Association (NVCA).

The deal count is also up 34 percent to 157 deals in the first half of this year. See below for PitchBook’s list of the 10 largest second quarter investments in the Seattle area.

The Seattle area’s trend continues to run counter to a national downturn in venture investment, which the NVCA terms a “self-correction.” Nationally, first half investment and deal count were down 10 percent and 15 percent, respectively.

The Seattle area has seen a couple of first-time venture funds emerge in 2017, including locally focused Flying Fish Partners and Curious Capital. While the PitchBook data does not include either of those funds, that’s in keeping with a national trend: 15 first-time funds have raised investment capital so far in 2017, bringing in a combined $1.5 billion, a pace that would make this the best year for new funds in a decade.

Seattle has its first IPO prospect since mid-2016 with digital real estate brokerage Redfin, which filed paperwork with the SEC June 30 to raise up to $100 million. So far, 27 venture-backed companies have gone public in 2017, with most of that activity in the second quarter.

While Seattle companies raised a healthy sum, the other end of the venture pipeline was quiet: PitchBook notes five exits during the quarter in the Seattle area, but only reported details for the acquisition of Placed by Snap for $200 million, according to PitchBook data.

The top 10 investment deals in the second quarter, as tracked by PitchBook, with pre-money valuations given as available:

  • Smartsheet, $52.1 million raised at a $800 million pre-money valuation
  • Qumulo, $30 million raised at a $204.7 million pre-money valuation*
  • Auth0, $30 million raised
  • Outreach, $30 million raised at a $170 million pre-money valuation
  • Echodyne, $29 million raised at a $65 million pre-money valuation
  • CreativeLive, $25 million raised at a $110 million pre-money valuation
  • LabConnect, $24.5 million raised
  • Textio, $20 million raised at a $95 million pre-money valuation
  • Bulletproof, $19 million
  • Sensoro, $18 million

*Update: A Qumulo representative said the pre-money valuation is inaccurate and that the company does not disclose valuations. PitchBook provided this statement describing how it calculates pre-money valuations: “We gather valuations from a variety of public sources and direct outreach to the companies. If we’re unable to find a company’s valuation via public sources, we calculate it—using information from corporate and regulatory filings, and a proprietary formula that’s similar to calculating market cap for a public company. This formula considers factors like actual share price, # of shares authorized and issued, as well as potential option pool sizes. With this, our team comes to a conclusive number that (based on feedback and on-going QA tests) generally falls within a five to ten percent margin of error. The next step of our research process is critical: after receiving new information about a company (valuations or other), our research team contacts the company’s executives for verification and additional information. At this point, the company has full power to update or correct any information on their PitchBook profile, including their valuation.”

Earlier Xconomy coverage:

Photo credit: Seattle photo by Nitish Meena on Unsplash, used under the site’s nonexclusive copyright license.

 

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

Trending on Xconomy