Philly’s venture funds capitalize on momentum

Philly’s venture funds capitalize on momentum

By: Sara Warden

2 min read March 2020 — According to a recent report by the Philadelphia Alliance for Capital and Technologies (PACT) and Pitchbook, Philadelphia’s 2019 venture investment of $2.5 billion puts the city in seventh place nationally as a VC giant. And as more and more funding flows into Philadelphia, venture capital investment shows no sign of slowing down.

 

In 2019, 225 deals were recorded in Philadelphia, totaling just over $2.5 billion, up just slightly in number of deals since 2018, but notably, deal value has skyrocketed. In 2018, Philly’s VC deals were worth just under $1.5 billion. Across all stages, median deal values have increased, with angel and seed investment in 2019 coming in at a median $1.2 million compared with $600,000 in 2018, early VC doubling to $3.8 million from $1.9 million in 2018 and late VC reaching $7.5 million from $4.2 million in 2018.

The most active investor is Ben Franklin Technology Partners of southeastern Pennsylvania, according to the report, having funded 356 deals. It is a leader in seed capital investments with over $200 million invested over 35 years, launching over 2,000 companies. It is not just volume that counts, but also value. In a record for a Philly-based company, the largest funding round in 2019 was for food delivery service goPuff, which raised $750 million.

But despite this momentum, Philadelphia still has a way to go before it can catch up to VC hubs such as San Francisco, the report says. “Deal size inflation for Philly—though broadly consistent with the YoY persistence of rising valuations across the US—has yet to push median deal sizes to levels reached elsewhere,” the report said. “For example, the median for an early-stage deal in Philadelphia was $3.8 million—roughly half the US median.”

So what are Philadelphia investors doing about it? One lawyer, Ajay Raju, is setting up three new VC funds in the city to capitalize on its success. “There is no shortage of talented founders with great ideas and road maps who are designing the future,” he told the Philadelphia Inquirer. The three companies – 215 Capital, Backswing Ventures and Togo Ventures – will target different investors and aim funds at different sectors. 

215 Capital will be an exclusive, subscription-only Series A pledge fund with just 100 investors and a focus on technology, whether in software as a service or real estate technology. Togo Ventures will focus on the pharma industry, from digital health to clinical trials. And Backswing will be “sector agnostic” to bridge the gap for anything in between. 

“We are geography-agnostic and return-devout,” Raju told the Inquirer in an interview, but admitted that Philadelphia has plenty of opportunities ripe for investment and entrepreneurs hungry for capital to realize their ideas. “Philly’s innovation ecosystem needs capital and plenty of it,” he said.

 

To learn more about our interviewees, visit:

https://www.sep.benfranklin.org/

https://gopuff.com/home

https://www.215capital.com/

https://www.backswingventures.com/

https://philadelphiapact.com/

https://pitchbook.com/

 

Tech and funding create GFL’s perfect innovation storm

Tech and funding create GFL’s perfect innovation storm

By: Sara Warden

2 min read March 2020 — The convenience economy means reality is increasingly becoming virtual, cloud-based and autonomous. Essentially, anything that can make life less complicated is likely to be a hit. From online banking to ride-sharing, the possibilities of technology are endless. Not only is Greater Fort Lauderdale developing the software, but it is also providing the venture capital funding.

 

Greater Fort Lauderdale is among the Top 50 U.S. tech talent hubs. No wonder, then, that so many tech startups are choosing the city as their home. Everything from semiconductors to security analytics, to telehealth and connected cars – you name it, Greater Fort Lauderdale has it.

Last month, GFL-based bookkeeping and accounting app Xendoo was chosen as one of 10 companies in South Florida that would receive $75,000 to scale their business via the Finance Forward US accelerator program, which is backed by the MetLife Foundation, PayPal and Village Capital. Previously, Xendoo had secured $3.5 million in funding.

Greater Fort Lauderdale’s technology chops are clear to see. Since 1994, Fort Lauderdale has been the headquarters of Microsoft Latin America. Motorola Solutions’ Plantation facility developed an advanced two-way portable radio for use by police, fire rescue and other first responders. Southeast Florida was home to the first IBM PC and the first smartphone.

GFL also knows how to foster talent. Citrix was established in Fort Lauderdale in 1989 as an IT company with market-leading cloud, collaboration, networking and virtualization technologies and now boasts $2.97 billion in annual revenue. And Plantation-based construction project management company e-Builder was acquired by Trimble for $500 million in 2018.

The region is not only bringing the technology and innovation, but also the funding. Fort Lauderdale-based AutoNation recently announced it would invest $50 million in Alphabet’s Waymo self-driving technology. “Waymo is the proven leader in self-driving technology, is the only autonomous vehicle company with a public ride-hailing service, and is successfully scaling its fully driverless experience,” Waymo operating board member Egon Durban told Silicon Valley Business Journal.

Another factor behind the marriage of tech and venture capital is the concerted effort of associations to continue to bring both sectors together. TechLauderdale promotes involvement in Broward County’s tech ecosystem by hosting events that bring together technology companies and funding. The association also promotes education and retraining for those who want to get involved in startup activity. 

“Our startups were having problems scaling up,” Richard Berkowitz, chair to the Broward Workshop’s technology committee, told South Florida Business Journal. “Our hope is that the rest of the business community and technology community in Broward County joins in creating this very strong platform to enhance our tech ecosystem.”

 

To learn more, visit:

 

TechLauderdale: https://techlauderdale.org

Xendoo: https://www.xendoo.com/

Citrix: https://www.citrix.com/

AutoNation: https://www.autonation.com/

Waymo: https://waymo.com/

Broward Workshop: https://www.browardworkshop.com/

 

Healthcare in Philadelphia Going from Strength to Strength

Healthcare in Philadelphia Going from Strength to Strength

By: Sara Warden

2 min read January 2020 — Innovation in Philadelphia’s healthcare industry has long been recognized as exemplary, and it served as a focal point of Philly’s B.PHL Innovation Fest held in September. Recent developments show that healthcare pioneers were right to bet on Philadelphia.

It’s only a week in and already 2020 has been a big year for healthcare in Philadelphia. Healthcare software company Repisodic announced this week it has raised $1.75 million from a private stock sale led by VC company American Enterprise Ventures. Repisodic was nominated among just 17 early-stage companies that received a total of $3 million in pre-seed funding from Ben Franklin Technology Partners of Southeastern Pennsylvania in 2018.

The technology produced by the company is based on patient discharge care and was catalyzed by the “discharge planning rule” enacted by the Centers for Medicare and Medicaid Services (CMS) in November, which mandated that patients “be in the driver’s seat, playing an active role in their care transitions to ensure seamless coordination of care,” according to CMS Administrator Seema Verma.

Repisodic allows patients to access a list of post-acute care providers in a seamless and easy way, with search functions tailored to the patient’s specific medical records and requirements. “The sheet of paper (given to post-acute care patients by hospitals on discharge) may have names and addresses and phone numbers, but not a whole lot of other information,” Mike Cwalinski, the company’s co-founder and CEO, said to Philadelphia Business Journal. “We help patients make better and faster decisions at the time of discharge.”

Elsewhere, Philly-based gene therapy company Spirovant Sciences was last week acquired by Japanese pharma company Sumitomo Dainippon Pharma in a $3 billion transaction. “(Sumitomo) is incredibly committed to Spirovant and to gene therapy, particularly the work going on here in the Philadelphia area,” said Joan Lau, Spirovant’s CEO, in an interview with Philadelphia Business Journal. “They will be spending time here to get to know the area more intimately.”

Spirovant’s gene therapies aim to repair mutations that come as a side-effect from cystic fibrosis and cause difficulties with breathing. Earlier in the year Spirovant had been acquired by New York-based Roivant, which sold its ownership stake in five companies – one of which was Spirovant – to Sumitomo. “I think it’s a testament to our underlying technology from the University of Iowa and CHOP,” said Lau when asked about being acquired twice in one year. “We’ve been able to show strong preclinical data.”

 

To learn more, visit:

https://www.repisodic.com/

https://benfranklin.org/

https://www.cms.gov/

https://spirovant.com/

https://www.ds-pharma.com/

https://bphlfest.com/

https://www.americanenterprise.com/aeventures