Hartford Business Journal

28 HARTFORDBUSINESS.COM | SEPTEMBER 30, 2024 Connecticut's Startup Ecosystem: A Promising Horizon C onnecticut is carving out a significant niche in the Innovation Economy. With close proximity to multiple major metro areas, top-ranked academic institutions, and a growing venture capital ecosystem, Connecticut is well positioned to foster a vibrant startup culture. J.P. Morgan just released its Innovation Economy Outlook for 2024 and the report finds: • Capital Fundraising: U.S. VC dry powder remains near an all- time high at nearly $300B. However, funds are facing difficul- ties raising capital, particularly within historically underrepre- sented groups. • Venture Investment: While deal count is still lower for most sectors, deal sizes have increased – particularly within AI, Healthtech and Climate tech. Notably, AI represents ~20% of capital invested in the $100M+ deals seen in H1 2024. • Valuations: After falling for the past two years, valuation ranges have started to trend up again, especially for early-stage rounds. The data reveals more nuance; looking at companies that raised at a $500M+ valuation in 2021, 38% have yet to raise again where- as 10% have exited and 1% are out of business. • Exit Activity: Companies are still reluctant to exit, with many stuck between a high private market valuation and lower public market valuation multiples. Despite this, IPO filing ac- tivity indicates there might be a burst of activity in Q3 before tapering off into the election. MANUFACTURING: A Renaissance in Innovation Connecticut has a storied history in manufacturing, and the sec- tor is experiencing a renaissance driven by innovation. Advanced manufacturing technologies, including robotics, AI and machine learning are transforming traditional manufacturing processes. The state's manufacturing sector is increasingly integrating these technologies to improve efficiency, reduce costs, and enhance product quality, supported by industry organizations such as Con- necticut Center for Advanced Technology and ManufactureCT. HEALTHCARE: A Hub for Health Tech Innovation Healthcare is another sector where Connecticut is making significant strides. The state is home to world-class healthcare institutions and research facilities, making it a fertile ground for health tech innovation including its Health IT Advisory Council. Startups in Connecticut are developing groundbreaking solutions in telemedicine, medical devices, and personalized medicine. The state's focus on health tech is not only attracting venture capital dollars but also fostering collaborations between startups, healthcare providers, and academic institutions. INSURTECH AND FINTECH: Dynamic and Growing Sectors Fintech and Insuretech are dynamic and growing sectors. As the primary location for the insurance industry, a leading market for financial services, and home to a tech savvy population, Connecticut is well-positioned to capitalize on this opportunity. Startups in the state are developing innovative solutions in digital banking, investment platforms, and blockchain technology. Looking to the Future? Connecticut's Innovation Economy is on a promising ascent. With a strong foundation in education, a growing venture capital ecosystem, and existing talent in segments ripe for innovation, the state is well-positioned to become a significant player in the U.S. innovation landscape. As the state continues to nurture its startup ecosystem, particularly in manufacturing, healthcare and fintech, the future looks bright for Connecticut's startup community. JPMorganChase has been serving the state of Connecticut for over 175 years and made nearly $6 million in philanthropic investments over the past five years in communities across the state to create a more inclusive economy for all. With more than 800 employees, over 60 Chase branches, including four new locations expected by the end of 2024, and a growing a growing Private Bank and Commercial & Investment Bank, JPMorgan Chase is committed to Connecticut and its future.

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