Hoosier VC haul soft in 3rd quarter, but year has been strong

Hoosier companies raised about $12.1 million from venture capitalists in the third quarter—a small haul compared to previous quarters, but enough to keep the state on track for a relatively strong year.

Five Indianapolis-area companies were the destinations for that cash, according to the MoneyTree report released Friday by PricewaterhouseCoopers. But the showing was less than half of the roughly $25 million raised in both the first and second quarters.

Still, the total for the year sits at $62.5 million, which already tops the totals raised in 2013, 2014 and 2015.

"I am pleased that we are seeing an upward trend in venture capital from both in and out of state being attracted by a variety of Indiana companies," said Mike Langellier, CEO of TechPoint, a not-for-profit aimed at strengthening Indiana’s tech sector.

"The $6.5 billion in acquisitions and IPOs over the past decade have increased the amounts of angel investors investing in these companies," he said. "We have to keep working together to build strong start-up and scale-up companies and to attract even more venture capital to them so they can become our next success stories."

Enterprise software company Bolstra LLC and legal-tech firm Doxly Inc. each raised their first rounds of venture capital, pulling in $1.5 million and $2.8 million, respectively, the report said. Sales-software company Salesvue LLC pulled in $366,000 in its second fundraising haul.

The rest came from two more mature Indianapolis tech outfits. SmarterHQ, a contextual-marketing software maker, quietly raised $2.7 million, while Octiv Inc., which sells sales-productivity software tools, raised $4.8 million.

SmarterHQ landed on the Inc. 5000 list in August with 2015 revenue of $3.8 million, up 585 percent from 2012. Octiv doesn't disclose revenue. In July, it announced a name change (from Tinderbox Inc.) and said it plans to add 272 jobs by 2021.

On occasion, the MoneyTree report doesn't capture all fundraising activity in an area, sometimes for methodological reasons. This past quarter, it didn't mention the $1.1 million raised by file-management software firm SmartFile Inc.

Nationally, venture capitalists poured $10.6 billion into 891 deals in the third quarter. That dollar figure was down 32 percent from the second quarter this year and 36 percent from the third quarter last year.

"The decline in venture capital activity this quarter is part of the normalization process that is expected after a quarter in which record-breaking investments dominated headlines," Tom Ciccolella, U.S. venture capital market leader at PwC, said in a written statement.