Despite pandemic, 2020 a very healthy year for South Florida venture capital

By Nancy Dahlberg

In a global venture capital report released Wednesday, the Miami-Fort Lauderdale metro area was highlighted as an emerging hub for venture activity. South Florida ended 2020 with the fastest Q4 VC growth of any U.S. metro, thanks largely to the mega-deal of a Miami unicorn.

The MoneyTree report, produced by PwC and venture research firm CB Insights, tracks institutional equity investment into private venture-backed companies.

Among the report’s highlights:

  • In the Miami-Fort Lauderdale metro area in 2020, $1.9 billion was invested across 70 deals. For the entire state, $2.86 billion flowed into Florida-based companies, across 121 companies, according to MoneyTree. 
  • In the Miami metro in the fourth quarter, venture capitalists invested more  than $1.2 billion across 10 deals. That's up  685% over Q3, the highest spike among metro areas by far, and it is primarily  because of the two South Florida megadeals: Miami-based REEF Technology, the smart cities startup that raised a $700 million venture and private equity round in November from SoftBank and other funders, and Fort Lauderdale-based logistics-tech startup ShipMonk, which raised $290 million from growth equity firm Summit Partners in December. The Miami-Fort Lauderdale metro area's Q4 growth bested San Diega (+298%), Denver (+263%) and Atlanta (+111%).
  • For investment dollars in Q4, the Miami-Fort Lauderdale metro ranked 6th, behind San Jose/San Francisco, New York, Boston, San Diego and LA, and followed by CHicago, Denver, Seattle and Atlanta. It was not in the top 10 for number of deals.
  • REEF was also one of the top five deals in the U.S. for all of 2020, ranking number 4 along with Juul Labs, which also raised $700 million. The Miami unicorn was in good company, behind No. 1 SpaceX ($1.9 billion), Epic Games and Resilence. For the fourth quarter, REEF was No. 2 in the country, behind Resilience and ahead of Relativity Space, Nuro and Aurora, all California-based companies.

Nationally, 49% of investment dollars were part of mega-rounds, and in the Miami metro, the three mega-rounds of 2020 – REEF, ShipMonk and Magic Leap’s $350 million round in Q2 —up 70% of the venture dollars flowing into South Florida companies.

Across the U.S., investments reached a record high as well. Companies raised nearly $130 billion, up 14% year over year, according to the MoneyTree report. However, the tolal number of deals, 6,022, was down 9% year over year. Nationally and locally, while later-stage deals serged, the number of early-stage deals  decreased, particularly in the seed round stage. Despite gains by Rise of the Rest cities such as Miami, the three usual states -- California, New York and Massachusetts -- still hauled in nearly three-quarters of the funding.

The MoneyTree report also found that U. S. venture activity was dominated by four emerging areas: fintech, AI, digital health and medical devices. The report also highlighted that so-called smart city startups grew by 1,280% in Q4 and hit $3.8 billion in 2020; REEF was the top-funded smart city company.

Nationally, 28 new companies reached unicorn status, that is companies valued at $1 billion or more, in 2020, bringing the total number to 225, according to MoneyTree.

Led by Airbnb, national IPO activity jumped to a record high of 147 in 2020, as IPO exits increased for the third straight quarter in Q4’20. In fact, Q4 set a new record in the number of new unicorn births, M&A exits, and IPOs. 

Download the MoneyTree report here.

READ NEXT: The year in VC, Part 2: Top 2020 deals in South Florida - and more 

Stay tuned for my upcoming venture capital report on the region. Follow me on Twitter @ndahlberg and email me at ndahlbergbiz@gmail.com

Nancy Dahlberg
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