Investment in Oregon startups doubles, topping $1 billion for the first time

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Oregon entrepreneurs had a financial windfall last year, raising $1.6 billion in venture capital for their start-ups, according to new industry data released late Thursday. That’s by far the highest in state history and nearly doubles Oregon’s startup haul as of 2020.

Nearly half of Oregon’s venture capital funding in 2021 went to just two companies: Dutchie, a Bend company with technology to help run marijuana businesses; and NuScale Power, a Portland company developing a new class of nuclear reactors based on innovations developed at Oregon State University.

Oregon’s investment total reflects a broader venture capital funding boom, according to PitchBook and the National Venture Capital Association, which compiled the latest numbers. They reported that venture capitalists invested $330 billion nationwide in 2021, also about double the previous year’s total.

“Much of the new investment records can be attributed to record levels of capital washing into the system,” said John Gabbert, CEO of PitchBook, a Seattle-based investment research firm.

Venture capital outperforms other investment options, Gabbert said, so he predicts another banner year nationally in 2022. That doesn’t necessarily mean another big year for Oregon, because much of the Oregon’s funding was focused on two companies that raised unusually large amounts.

Venture capital investing has rarely been such a big part of Oregon’s economy as it is in Seattle or the Bay Area, which regularly spawn great new companies out of thin air. But there are signs that Oregon could once again develop big business.

The state produced four new public companies in 2021, including coffee stand chain Dutch Bros, whose September offering was Oregon’s first substantial IPO in 17 years. Two other companies, KinderCare and NuScale, hope to go public in 2022.

These findings could inspire other Oregon entrepreneurs or inspire investors to take a fresh look at the state.

Dutchie’s investment last year totaled $550 million, with investors in its latest round valuing the Bend company at $3.75 billion. Founded in 2017, Dutchie is already among Oregon’s most valuable companies.

The company says more than 5,000 marijuana stores in the United States and Canada use its technology to process $14 billion in annual sales. Early backers included Snoop Dogg’s investment firm, NBA All-Star Kevin Durant and former Starbucks CEO Howard Schultz.

NuScale’s investment was not conventional venture capital. Texas-based energy company Fluor Corp. owns a majority stake in the Oregon-based company, which raised $192 million in outside investment last year to help fund development of its modular nuclear reactor.

The company hopes that the fight against climate change – nuclear reactors do not emit carbon – will revive interest in nuclear energy.

NuScale claims its technology is safer and more efficient than conventional nuclear reactors. Its reactors can be built in smaller pieces over time, and the company says they automatically shut down if they lose power, without risking a catastrophic meltdown.

NuScale hopes to start trading on the Nasdaq this year after merging with a publicly traded investment fund known as a “special purpose acquisition company” or SPAC. The company expects to raise up to $413 million under the deal.

Still, NuScale’s technology is not market proven and the company needs key regulatory approvals. Its first operational reactor is still several years away.

Oregon’s other major venture capital rounds were split among half a dozen companies in a wide range of industries, from personnel assistance to biopharmaceuticals to commercial software and hardware. clean energy.

This wide range of businesses reflects a growing diversification of Oregon’s entrepreneurship away from its historic focus on electronics and, later, software.

If the new list of companies continues to grow, they could make the state less susceptible to the boom and bust cycles that have plagued it economically due to its dependence on a small number of sectors.

–Mike Rogoway | [email protected] | Twitter: @rogoway |

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