Investment in young Oregon companies hit another high in 2019, climbing to nearly $700 million.
That’s according to data out Monday evening in the PwC/CB Insights Money Tree Report, an annual tally of national venture capital activity.
Last year’s haul was 7% larger than 2018, but it may be misleading in some ways. While the total raised by Oregon entrepreneurs was the largest since the dot-com era, the number of companies funded fell by more than 40%, to just 43 — the lowest in several years.
That indicates Oregon’s startup funding is being concentrated in a smaller number of firms.
Indeed, nearly half of last year’s total Oregon startup investment went to one Portland company, Vacasa, which is building a national business managing vacation rental properties. Vacasa raised $319 million in October, positioning it to be the state’s first big new company in more than two decades.
Venture capital typically describes high-risk investments in startup companies with outsized growth potential. Such young companies can provide a foundation for new industries, or a new anchor for a regional economy.
Calculating annual venture capital dollars is always a tricky business, though. It requires making subjective decisions about what qualifies as startup funding and what is more properly classified as a private equity investment in an established, growing business.
Vacasa’s latest investment came from Silver Lake Partners, commonly associated with leveraged buyouts and private equity than with venture capital. Exclude Vacasa’s investment from the venture capital tally and 2019 doesn’t look so good for Oregon — investment would fall to $379 million, the lowest since 2016.
Venture capital tends to flow to tech companies, whose technology can enable them to scale up rapidly to create and capture new markets.
Other big Oregon rounds last year went to Portland marketing startup SheerID, which raised $64 million in November; to Wilsonville battery maker Energy Storage Systems, which raised $30 million the same month; and to Beaverton cloud computing company Bigleaf Networks, which raised $21 million in September.
Nationally, the MoneyTree Report put venture investment at $23 billion in 2019, down from $27.4 billion the prior year.