Startups

$1.5 billion reasons why healthcare investors may be able to find the Midwest on a map

Most states are now regularly attracting 10 figures in total investing.

Midwest healthcare investingHealthcare investors seem to be getting better navigating the Midwest, judging from the latest healthcare investing report from a regional biotech trade group.

Midwest startups attracted $1.5 billion in new equity investments in 2015, according to the BioEnterprise Midwest Healthcare Growth Capital Report, which comes out today. That’s less than the $1.8 billion in 2014, but also well above the usual nine-figures of investing the region had seen every year before 2014.

Also, the number of companies funded in 2015 increased by 16 percent.

But perhaps this is the most interesting statistic: in 2011 only three states (Minnesota, Missouri and Ohio) attracted more than $100 million in annual investments. Now seven of the 11 Midwest states and regions in the report attract nine-figures in capital.

“From a Midwest standpoint it’s a sign of health,” said Aram Nerpouni, president and CEO of BioEnterprise, said of the 2015 numbers.

One barometer that’s difficult to gauge: is the Midwest seeing more of the total investment dollars out there? That would be the ultimate measure of success for the region.

But it’s hard to contrast the investment trends in the Midwest against national ones. The Moneytree Report on investing trends, for example, doesn’t break out health IT dollars among its sectors, making a comparison impossible.

But the Growth Capital Report – and the uptick in investments per state – is a good barometer of the aggregate activity and how much traction “flyover states” startups are finding in the market. There’s also plenty of anecdotal information to back up the claim the Midwest continues to emerge as a valuable source of dealflow. Our MedCity News’ INVEST conference this April in Chicago, for example, has already attracted a record number of investors and startups.

“What it tells you is that investors put money here,” said Shaye Mandle, president and CEO of Minnesota’s Medical Alley trade group, said of his state. “It’s a good place to do business and get through the regulatory process.”

The Growth Capital Report gets its data by reviewing data from sources including The Wall Street Journal, Venture Source, SEC Filings, company press releases, and regional trade-group data, among others.

Here’s the investing per state and region (with the number of companies receiving investments in parentheses), according to the report.

  1. Minnesota: $423.4 million (102)
  2. Ohio: $331.4 million (58)
  3. Illinois: $217.12 million (20)
  4.  Michigan: $131.7 million (16)
  5. Missouri: $131.6 million (27)
  6. Western Pennsylvania: $112 million (20)
  7. Wisconsin: $113.2 million (34)
  8. Indiana: $41.5 million (14)
  9. Iowa: $16 million (4)
  10. Kentucky: $12.4 million (3)
  11. Kansas: $9 million (5)

healthcare investing in the MidwestPhoto: Flickr user CGP Grey