Funding for local startups plunges 30% amid market rout
Massachusetts startups raised $12.5 billion in venture capital in the first half of the year, marking a 30% decline from a year earlier amid falling stock market, runaway inflation and weakening of the economy.
A total of 505 local businesses raised funds in the first half of 2022, down 15% from 2021, according to data released Thursday by PitchBook and the National Venture Capital Association. Among the year’s biggest deals were Wakefield-based Agilitas, which raised $350 million to expand its clean energy storage business, and Boston-based Biofourmis, which is developing a healthcare platform virtual, raised $300 million.
While the S&P 500 index lost 20% in the first half of the year, tech stocks, often used as a benchmark for venture capital-backed startups, lost 27%. A year ago, tech stocks were hitting new highs, and Massachusetts startups raised a record $17.8 billion in the first half of 2021, more than had been raised in any previous full year.
The decline in local fundraising in 2022 was more severe than in California and New York, the only two states where companies raised more money than in Massachusetts. California startups raised $68 billion in the first half, down 12% from 2021. And New York startups raised $19 billion, down 13%.