Metro Denver startup funding still strong, bucking national trends

Support for the Denver-Aurora tech scene is staying strong so far this year, despite a national slump in venture capital, new data from Pitchbook shows.

Why it matters: The tech industry is a major driver of Colorado's economy, and it could act as a key cushion amid a likely U.S. recession.

• A slowdown in investments could lead to fewer startups becoming major employers, or even layoffs.

The big picture: U.S. startup investment fell 23% in 2022's second quarter, to $62.3 billion, according to Pitchbook data released this month.

• That's the steepest drop since 2019, the New York Times reports.

Yes, but: Mile High City startups raised $1.8 billion in Q2, up roughly 185% from the same period last year, the report shows.

By the numbers: The metro area's second quarter delivered 75 deals — 17% lower than the same time period in 2021.

• Of the $1.8 billion raised in Q2 2022, $505 million went to Crusoe Energy Systems, a Denver-based startup that uses excess natural gas from oil and gas companies to power cryptocurrency mining operations.

Details: After Crusoe's hefty haul, these three startups raised the most money across Colorado in Q2:

• Velocity Global: $400 million raises in series B funding

• Pax8: $185 million raises in series G funding
• Guild Education: $139 million raised in series F

What to watch: Denver's early-stage startups are preparing for a possible drop in valuations and a venture capital downturn.

What they're saying: Young startups face more pressure to prove their efficiency and moneymaking abilities, Harry Hollines, chief strategy officer at the Latino Leadership Institute, recently told the Denver Business Journal.

• "Those who have a line of sight toward profitability will get the VC money for the next 18 or 24 months," Hollines said.

Editor's note: This story has been corrected to say that Guild Education raised $139 million in the company's series F round of funding, not series G.