Venture investment in companies based in Washington state has continued to grow, making Washington No. 4 in the nation in total number of fundings and total dollars invested, according to data from Dow Jones VentureSource. Before September 30, Washington had been solidly in fifth place, chasing Texas, which had been fourth for several years. But continued robust venture investment in 2017, including through the third quarter, moved Washington into Texas’ spot.
Although Washington is unlikely to take the No. 3 spot anytime soon — the gap between the top four states for venture investment is significant — being No. 4 is no small matter. California ranks No. 1, with more than 50% of all venture investment going to companies based there. New York is second, and Massachusetts is third.
The battle between Washington and Texas continues, because the levels of venture investment are similar, but Washington venture deals and dollars are continuing to grow while Texas has seen a more volatile venture investment marketplace over the past few years.
For the quarter ended September 30, Washington saw 43 deals that raised $485 million for state-based companies. That brought the nine-month total to 128 deals raising $1.29 billion for companies in our state. That is a 42% increase over the number of deals completed during the same nine-month period in 2016 and a 30% increase in the dollars funded over that period.
At $1.29 billion in fundings through September 30, Washington has tied the total dollars invested for all of 2016 and has beaten every other year except 2015 and 2014 in terms of the venture dollars invested here. If this pace continues, Washington should surpass the level of venture investing realized in 2014 and should be approaching the record level of 2015.
As a reminder, 2015 was unusual. Nontraditional venture investors entered the venture marketplace in late 2014 and stayed through the end of 2015; but then, for the most part, they exited the marketplace. While we are seeing some small amount of non-venture investing happening in 2017, the vast majority of the dollars being invested are from traditional venture investors.
This is important because while venture investment can ebb and flow with the economic times, available funds and other investment vehicle returns, traditional venture investors are generally around for the long term and they consistently invest in the marketplaces where they expect to see success. Washington is now the fourth most likely state to see those venture deals and dollars — and that can only mean good things for the companies that choose to start and grow here.