Midwest Healthcare Startups Raise $777 Million in First Half of 2014

state_magnets_midwestern_united_states

Midwest healthcare startups reported $777 millionin total investments across 139 companies in the first half of 2014, according to the BioEnterprise Midwest Healthcare Venture Investment Report.  The totals are the highest recorded for the region both in dollars of financing and number of companies funded since BioEnterprise began compiling the report in 2005.

Chicago, it’s time for rally caps. 

Minnesota led the way in total financings ($184 million), followed by Ohio ($155 million) and Michigan ($114 million).  Among regions, MinneapolisDetroitAnn Arbor and Cleveland were the leading areas for healthcare investment in the Midwest. Unfortunately Chicago and Illinois are trailing our neighbors on investments.

“It’s been a banner first half for Midwest healthcare startups,” said Aram Nerpouni, President & CEO of BioEnterprise.  “Investment activity continued its upward trend and the company pipeline once again attracted broad investor interest with a record number of companies receiving funding.”

By sector, the equity funding was as follows:

  • Medical device companies: $342 million (44%)
  • Biopharmaceutical companies: $240 million (31%)
  • Healthcare software and service companies: $196 million (25%)

Several large deals contributed to the impressive first half showing.  Representing its strong device industry,Minnesota reported 4 deals over $20 million each (Holaira, Inspire Medical, NxThera, Tendyne), Missouri’sEssence Group Holdings raised $71 million in the software and services sector, Michigan’s ProNai Therapeutics, a biotech company, attracted $60 million, Orthopediatrics, an Indiana device company, received$39 million, and Ohio’s Aerpio Therapeutics raised $22 million.

For complete state and region results across the Midwest see the following tables.

Table: Midwest Healthcare Venture Investment (By State)

State

First Half 2014

First Half 2013

First Half 2012

First Half 2011

First Half 2010

$

# of

$ Millions

# of Cos.

$ Millions

# of Cos.

$ Millions

# of Cos.

$

Millions

# of Cos.

Millions

Cos.

Illinois

52.6

10

27.1

4

84.3

4

18

1

123.4

6

Indiana

100.8

18

11.7

5

51.6

9

10.5

4

18.4

10

Iowa

N/A

1

Kansas

5

1

7

1

3

1

18.9

4

Kentucky

25.9

2

4.1

4

10.5

2

Michigan

113.9

8

37.9

6

55.9

9

21.8

5

35.8

5

Minnesota

183.5

43

69.3

45

86.1

9

88.3

13

42.8

7

Missouri

85.1

5

14.1

6

32.4

1

32.2

4

5.7

2

Ohio

155.3

31

154.9

38

126.4

44

80.1

25

47.3

27

Western Pennsylvania

63.6

18

17.3

8

32.8

12

8.2

12

59.6

7

Wisconsin

17.5

4

11.5

4

15.2

7

49

6

50

5

Total

777.3

139

350.8

117

510.6

97

315.2

75

412.4

75

 

Table: Midwest Healthcare Venture Investment (By Region)**

Region

First Half 2014

First Half 2013

First Half 2012

First Half 2011

First Half 2010

$

# of

$ Millions

# of Cos.

$ Millions

# of Cos.

$ Millions

# of Cos.

$ Millions

# of Cos.

Millions

Cos.

Chicago

48.3

9

27.1

4

84.3

4

18

1

123.4

6

Indianapolis

39.5

10

1.6

2

50.5

8

10.5

4

14.8

6

West Lafayette

15.9

4

0.2

2

2.8

2

Louisville

N/A

1

4.1

3

10.5

2

Detroit-Ann Arbor

100.3

6

37.9

5

55.9

9

21.8

5

31.7

4

Minneapolis

183.5

43

69.3

45

86.1

9

88.3

13

42.8

7

St. Louis

85

4

14.1

6

32.4

1

32.2

4

5.7

2

Kansas City*

5

1

7

1

3

1

18.9

4

Cincinnati*

43.3

3

42

3

40.2

5

23.8

4

7

2

Cleveland

97.7

24

79.1

27

104.1

34

50.2

18

36.7

17

Columbus

14.3

4

33.7

8

8.1

6

6.1

14

2.6

4

Pittsburgh

63.6

18

17.3

8

32.8

12

8.2

12

59.6

7

Wisconsin

17.5

4

11.5

4

15.2

7

49

6

50

5

* Border MSAs such as Kansas City and Cincinnati include deals from both states in those geographies; deals are aggregated into state totals based on the MSA’s principal state

**Regions’ totals do not equal states as not all areas are included in list of regions

The Midwest Healthcare Venture Investment Report includes all reported numbers and regionally collected data. Data are compiled by the BioEnterprise team from PitchBook, Private Equity Week, Wall Street Journal, Venture Source, SEC Filings, company press releases, www.biospace.com, and Midwest bioscience organizations and institutions.

The Report is funded, in part, by philanthropic support from the Fund For Our Economic Future, the Cleveland Foundation and the Burton D. Morgan Foundation.

To view additional data about Midwest healthcare business activity visithttp://www.bioenterprise.com/Reports/.