Indiana’s life-sciences sector, often hailed as a key driver of the state’s economy, landed a record $433 million in venture funding last year, despite the COVID-19 pandemic that challenged so many other sectors, from restaurants to airlines.
Venture capital is a critical source of funding for early-stage and mid-stage companies that are too young or too untested to go public or merge with a larger company. It’s seen as a key indicator of a sector’s health and potential growth.
The amount raised last year is roughly 65% larger than the previous record of $262 million, set in 2020, according to BioCrossroads, an Indianapolis-based group that promotes and invests in the state’s life-sciences sector and tracks the funding.
Thirty-nine companies signed deals last year for venture funding, for an average deal amount of $11.12 million. That is an improvement from the year before, when 39 companies signed deals worth an average amount 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,” Patricia Martin, president and CEO of BioCrossroads, said in an email Monday to IBJ.
In addition to the biotech and pharmaceutical companies, the sector includes agricultural technology, digital health, medical device, and orthopedics sectors, which all saw significant funding, she said.
Companies often use the venture funds to pay for expensive clinical trials and to develop and test prototypes. Investors give the companies money in exchange for partial ownership in the growing companies.
Last year’s deal sizes ranged from $20,000 to $208 million.
Six companies accounted for the lion’s share of the funding, $388 million. The other 32 companies split the remaining $45 million. But some observers say that lopsided funding allocation is nothing to be alarmed about, because some companies are farther 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 the Indiana life sciences community, both in terms of 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 not-for-profit tries 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 business presence for Indiana.
Here is a list of the top 10 Indiana recipients of venture capital funding in 2021:
- Inari, West Lafayette, $208 million to develop plant-breed 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 neuroscience 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 communications software
- Scioto Biosciences, Indianapolis, $5.5 million to develop new drugs targeting brain and bowel diseases
- Torigen Pharmaceuticals, Indianapolis, $3.27 million, to develop veterinary treatments