Hartford Business Journal

8 Hartford Business Journal | February 8, 2021 | HartfordBusiness.com Startups, Innovation & Technology By Sean Teehan steehan@hartfordbusiness.com L ast year Cromwell financial- technology firm Payveris LLC raised $6.7 million in venture capital investment — more than the previous three years combined. CEO Ron Bergamesca said Payveris, which provides digital- payment products to banks and credit unions, will use that money to hire up to 25 new workers and boost marketing efforts. Entrepreneurs in Connecticut have long lamented the difficulties in getting attention from VC firms, but Bergamesca said Payveris' location hasn't stymied its ability to raise money. "The [VC] interest level was more in 2020 than it was prior," Bergamesca said. "I think Connecticut is primed well [for future investment]." Bergamesca's bullish outlook isn't just steeped in blind optimism. In fact, Connecticut companies in 2020 had a banner year in securing venture investment, despite challenges posed by the pandemic. Connecticut businesses — mostly technology and healthcare-related firms — collectively raised $707.3 million in venture funding last year, Capital Infusion Despite pandemic, CT companies post strongest venture fundraising year in nearly two decades up 27% from 2019 and the most money raised in a single year in nearly two decades, according to data from the latest PwC/CB Insights MoneyTree Report. Experts say the higher-than- usual funding level likely isn't just an aberration. It seems to reflect a nationwide increase in venture capital expenditures and investors' increasing willingness to bet on companies outside tech strongholds like Silicon Valley. That, along with serious state- and private-sector led efforts to boost entrepreneurship in recent years, could bode well for Connecticut's future. However, the state still has a long way to go to compete with bigger markets. For example, while Connecticut companies had a strong fundraising year in 2020, the total amount raised was dwarfed by what Massachusetts-based firms pulled in: $14. 2 billion. "We do have a maturing ecosystem," said Matt McCooe, CEO of Connecticut Innovations, the state's quasi-public technology- investment arm, which helped finance about 100 deals in its 2020 fiscal year, which ended June 30. "What [VCs] are really looking for are places where there's a steady flow of talent, commitment from the government, and where VCs think they can recruit great people." Developing ecosystem The state's maturing startups ecosystem didn't happen on its own. Public and private stakeholders in recent years have been making serious efforts to bring in new companies from outside the state and cultivate them from within. Startup accelerators established in hubs like Hartford, New Haven and Stamford are mentoring entrepreneurs, and opening doors to deals and partnerships with major corporations, which makes them look more credible to VC investors, said Michael Brooder, Hartford office managing partner for national accounting and advisory firm Marcum LLP. Dozens of startups have now been through the seven Greater Hartford accelerators — such as Upward Labs and Stanley + Techstars — and about 40 from outside Connecticut subsequently established a presence in the state over the past three years, according to Launch[H]artford, a nonprofit that works as a go-between for startups, government officials and corporations in the city. "For the last couple of years there has been infrastructure put in place for emerging companies," said Brooder, who works with both large public companies and emerging tech companies. "I do think it's a big piece, these companies are coming through these programs learning how to pitch." Private and public sector actors are also working to spread the word about viable companies here, said Michael Cocuzza, president and chief technology officer at Enviro Power, a Hartford-based green tech company that makes environmentally-friendly boilers. Enviro Power raised more than $1.5 million in VC investment last year, and closed on $4.1 million in series A investment from CI and Pennsylvania-based Burnham Holdings — which invests in HVAC companies — at the tail end of 2019. The company in 2016 went through the nonprofit accelerator reSET, which works with local socially- conscious startups. Eric Rosow Company name Headquarters Funding raised Rallybio New Haven $145M Sema4 Stamford $121M Transposon Therapeutics Westport $49M Tomo Networks Stamford $40M Centivo Stamford $34M Point Pickup Greenwich $30M Starter New Haven $30M Simcha Therapeutics New Haven $25M IsoPlexis Branford $20M Springtide Child Development Trumbull $18M Top 10 CT venture fundraisers in 2020 Source: PwC/CB Insights MoneyTree Report Fintech startup Payveris, whose masked employees (shown above) work out of a Cromwell office, raised $6.7 million in venture capital investment last year. HBJ PHOTO | BILL MORGAN

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