Venture capital deal flow across Louisiana hit a high point when more than $191 million was invested in startup companies in 2018, up from $124 million in 2017.
There were about two dozen venture capital deals last year across the state, according to data collected by Cara Stone LLP, a New Orleans-based law firm. The data was collected from both publicly available and privately submitted information by individuals involved in the deals, so it doesn't simply include the law firm's clients.
Cara Stone's leadership was inspired to begin collecting the information several years ago because many of the startup deals were falling through the cracks of national reports. That's because the investors are largely wealthy individuals and family offices.
“There aren’t that many professionally managed (venture capital) funds that are local to Louisiana," said Mark Graffagnini, managing partner and founder of Cara Stone. "So sometimes Louisiana has a reputation that it's hard to raise capital but there's quite a bit of local capital here."
For example, restaurant delivery startup Waitr, which has since gone public, received early stage capital from angel investors all of whom were in Louisiana, rather than venture capital funds. The NO/LA Angel Network is one organization whose membership across the state selects startups to invest in through its own process.
But there are some regional venture funds in the early stages of formation, Graffagnini said.
One significant change since the report began is that there has been several startup exits — which refers to when investors cash out. Graffagnini recalled one $10 million exit, two $50 million exits and one $75 million exit for Louisiana startups recently but described all of those deals of privately-held companies as confidential.
“A lot of investors, particularly in South Louisiana are diversifying their own portfolio (outside of oil and gas) and they are taking a very hard look at early stage tech deals," he said.
In 2018, about half of the deals were for software businesses in New Orleans, according to the report. Only two companies in Baton Rouge received venture capital funding from investors last year.
The report doesn't disclose the names of any companies citing an agreement that businesses would share investment information in exchange for anonymity but public records show a glimpse of investment activity.
MobileQubes is a New Orleans-based technology startup that secured venture capital in 2018. MobileQubes, which sells battery charges in stand alone kiosks, raised $505,000 in equity from 23 investors, according to U.S. Securities and Exchange Commission filings. The startup sought to raise $1 million, records show.
ExemptMeNow is another New Orleans headquartered software startup founded in 2016 that sells compliance services online to nonprofit organizations. It raised $2 million from investors in 2018, which included funds from Newark Venture Partners, an early stage fund in New Jersey. The startup has since changed its name to Resilia.
Baton Rouge-based Grabit is a software startup that delivers food and goods on-demand through a smartphone application founded in 2017. The startup raised more than $250,000 from investors in a seed round in 2018.