Indiana’s life sciences sector, often hailed as a key driver of the state’s economy, landed a record $433 million in venture capital funding last year, despite the pandemic of COVID-19 that has challenged so many other industries, from restaurants to airlines.
Venture capital is an essential source of funding for start-up and mid-stage companies that are too young or untested to go public or merge with a larger company. It is considered a key indicator of a sector’s health and potential growth.
The amount raised last year is about 65% higher than the previous record of $262 million, set in 2020, according to BioCrossroads, an Indianapolis-based group that promotes and invests in the life sciences sector of the State and track funding.
Thirty-nine companies signed deals last year for venture capital funding, averaging $11.12 million. This is an improvement from the previous year, when 39 companies signed deals worth an average of $6.6 million.
“This record amount of venture capital investment in Indiana’s life sciences companies is indicative of the innovation, talent and growing entrepreneurial ecosystem here,” said Patricia Martin, President and CEO of BioCrossroads, in an email Monday to IBJ.
In addition to our biotech and pharma companies, the sector includes agricultural technology, digital health, medical devices and orthopedics, all of which have received significant funding, she said.
Companies often use venture capital funds to pay for expensive clinical trials and to develop and test prototypes. Investors give companies money in exchange for a partial stake in growing companies.
Last year’s deal sizes ranged from $20,000 to $208 million.
Six companies accounted for the lion’s share of funding, $388 million. The other 32 companies shared the remaining $45 million. But some observers say there is no cause for alarm over a lopsided funding allocation, as some companies are further along in their research and development and need huge sums to advance their experimental products or services. .
“It is exciting to see the growing investment in Indiana’s life sciences community, both in terms of the scale and diversity of companies pursuing biomedical research and development,” said Alan Palkowitz, president and CEO of the Indiana Biosciences Research Institute, in an email to IBJ. The Indianapolis-based nonprofit that attempts to bridge the gap between research universities and industry.
He added that venture capital funding is an important indicator of the potential for an expanded biomedical commercial presence for Indiana.
Here is a list of Indiana’s top 10 recipients of venture capital funding in 2021:
- Inari, West Lafayette, $208 million to develop plant breeding technology
- Greenlight Guru, Indianapolis, $120 million to develop medical software
- On Target Laboratories, West Lafayette, $21 million to develop cancer-targeting drugs
- Gate Neurosciences, Indianapolis, $15 million to develop neuroscientific therapies
- Spiras Health, Indianapolis, $14 million to develop clinical care technology
- Cured, Indianapolis, $10 million, to develop digital marketing
- Novosteo, West Lafayette, $8.39 million, to develop bone healing technology
- AuthentiCx, Carmel, $7.5 million to develop communication software
- Scioto Biosciences, Indianapolis, $5.5 million to develop new drugs targeting brain and gut diseases
- Torigen Pharmaceuticals, Indianapolis, $3.27 million, to develop veterinary treatments