The coronavirus caused some disagreement amongst Boston’s venture capital community. Looking back at our mid-2020 survey of its VCs, some saw the city’s strength in biotech and healthcare as a competitive advantage, while others saw Boston’s diverse startup ecosystem as key to its survival.
And some were worried that activity was about to clamp down. Jeff Bussgang, Flybridge Ventures, put it most frankly: “Q2 financing for Boston is going to fall off a cliff. The biotech industry may see some bright spots […] but the financing market has frozen up as solid as the Charles River in February.”
With fresh data in hand, it appears that the more bullish were more right than the bears and that, in a good turn of affairs for Boston startups, Bussgang was wrong.
The city, much like the country, did not see the sharply negative quarter that many anticipated. Boston posted record venture capital investment in the period, its highest total since at least Q3 2018 according to CB Insights data.
The same dataset also says that Boston-area companies raised $3.7 billion across 126 deals. Indeed, the good news from Boston’s Q1 bested better-than-anticipated-results from both the global venture capital community, and the domestic VC world in Q2.
Bussgang sent an updated metaphor to the TechCrunch team in response to this data: “It was a tundra in March and April but, as happens in Boston, April showers and May flowers kicked in and the financing markets started to gush again in the late spring/early summer, just in time to save Q2.”
While the data isn’t historically definitive due to reporting lags, it can be used as a directional sign that Boston’s rebound isn’t ahead of us, it’s upon us.
The solid numbers are a sign that COVID-19 and economic turmoil have put many startups in greater demand than before, which means that they need to amass money to meet growth needs.
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