Flow of Miami metro VC is strong in Q3 – and you can thank Adam Neumann for that

By Nancy Dahlberg

It could have been much worse.

Despite a venture capital slowdown nationally and globally, the Miami-Fort Lauderdale metro area companies pulled in $1.28 billion of venture capital across 74 deals in 2022’s third quarter. That intake of VC dollars ranked the Miami metro 6^th in the nation, its highest ranking among metro areas ever. Only seven metro areas pulled in over a billion dollars in Q3.

The national picture was not as bright. U.S. venture capital investment in the third quarter  fell to the lowest level in nine quarters, according to the Q3 2022 PitchBook-NVCA Venture Monitor released Thursday.

South Florida’s Q3 total did slide from its pace of Q1 and Q2, according to Pitchbook’s new data, but not nearly as much the slide nationally between Q2 and Q3, where funding fell by more than a third. What’s more, the Miami metro area is on track for a record-setting year, despite the murkier picture nationally.

In the Miami metro area, the top deal was a16z’s $350 million investment into Adam Neumann’s Flow, followed by Muck Rack’s $180 million megaround, according the Venture Monitor Report.

Statewide, startups in Florida attracted $1.45 billion across 130 deals. South Florida attracted 88% of the dollars and 57% of the deals.

According to my research, $5.3 billion flowed into startups into 2021. Through the first three quarters of this year, according to Pitchbook’s numbers, South Florida startups have pulled in $4.6 billion. Unless our region’s flow of funding in Q4 falls off by 50% or more, the Miami metro area would set another record.

Here are top deals in South Florida in Q4, according to Pitchbook:

• Flow: Early stage Miami-based crypto-focused proptech company founded by Adam Neumann, $350M
• Muck Rack: Later stage Miami-based Business productivity for media/PR, $180M
• Avenue: Later stage Miami-based fintech, $95M
• Halborn: Early stage Miami-based crypto network management software, $90M
• Boopos: Early stage Miami-based small business lending platform, $58M
• Sardino: Early stage Miami-based network management software, $51M
• Betr: Early stage Miami-based esports platform, $50M
• ILiAD: Later stage Weston-based drug discovery startup, $43M
• Alleaves: Early stage Deerfield Beach-based agtech software, $40M
• OpenStore: Early stage Miami-based ecommerce purchasing platform, $32M

Pitchbook logged just two exits for South Florida, both for undisclosed values.

THE NATIONAL PICTURE

Nationally, Q3 VC fell to the lowest level in nine quarters, as the VC ecosystem is showing more signs of distress in response to ongoing economic headwinds.

Venture-backed companies collected just $43 billion across an estimated 4,074 deals in Q3 2022. Estimated deal counts have fallen nearly 20 percent from the quarterly high in Q1 2022, the Venture Monitor reported. Deal activity across all stages recorded signs of distress, and the market continued to become increasingly consolidated with fewer exits than at any time in recent history. Still, dry powder remains at the highest level ever, according to the report, after years of record fundraising.

Total dollars invested in late-stage VC decreased by 48.3% from the Q2 figure of $48.1 billion and set a record eleven-quarter low. The median late-stage deal size in Q3, $10.0 million, decreased by a third from the 2021 full-year figure of $15 million.

On the exit front, there have been just 59 public listings so far this year, compared with 303 in 2021 and 145 in 2020. This year’s total exit value could fall below $100 billion for the first time since 2016.

While overall fundraising figures are strong, reaching a new annual high of $150.9 billion in Q3, established managers received the lion’s share of commitments while emerging GPs struggled, the Venture Monitor said. 

“The VC slowdown narrative that has been pervasive in the market this year has finally materialized in the data, with nearly every metric aside from fundraising falling sharply in Q3,” said Pitchbook CEO John Gabbert, in a statement.

“The VC ecosystem, however, has shown remarkable resiliency in the face of continued economic headwinds, raising record levels of capital and closing an unexpectedly high number of deals,” he continued. “In many ways, 2021 was an outlier year, and the VC market is now returning to pre-pandemic levels and long-term trends of steady growth.”