A decline in U.S. venture capital financing in the second half of 2016 resulted in the fewest number of VC deals for Minnesota companies in a dozen years.
For the year in the state, there were 23 venture capital deals, raising $339.4 million, according to data from the PricewaterhouseCoopers/CB Insights MoneyTree report. It was the lowest number of such deals since 2005, which saw only 20 deals, and the lowest amount raised since the $267.9 million from 39 deals in 2013.
For the second quarter in a row, the number of venture capital deals in Minnesota has declined. The three deals in Minnesota during the fourth quarter of 2016 were the fewest since the second quarter of 2010.
Nationally, the number of deals declined 14 percent from the third quarter to the fourth, and the amount raised declined 17 percent in that period. For all of 2016, 4,520 deals raised $58.6 billion, down 16 and 20 percent, respectively, from 2015's annual totals.
Anand Sanwal, co-founder and CEO of CB Insights, a New York-based data analytics firm, said 2016 compares better with 2014.
"For those who predicted 2016 would be the popping of the venture bubble, it was not," Sanwal wrote in a release. "Yes, it was a tougher year in terms of deal activity and funding, but vs. 2014, which we can call a more normal period, 2016 compares quite favorably."
Tom Ciccolella, U.S. venture capital leader at PwC, said in a release: "Despite continued deceleration in venture capital investment activity, the start-up ecosystem remains flush with quality deals."
The three state deals in the fourth quarter raised $56 million, which was 59 percent more than what the five deals in the third quarter raised, said the MoneyTree report. That total was $35.2 million.