May 3, 2023 - Business

The Shift: Northwest Arkansas tops $200M in venture capital

Venture capital invested in <span style="background:#0b6abf;padding:2px 5px 1px;color:white;">NWA</span>, <span style="background:#cabd86;padding:2px 5px 1px;color:white;">Little Rock</span> and  <span style="background:#00ab58;padding:2px 5px 1px;color:white;">Tulsa</span>  metro area companies
Data: PitchBook; Chart: Jared Whalen/Axios

Arkansas companies raised a record $201.2 million in venture capital last year, a mind-boggling 87% jump from the previous record of $107.6 million in 2021.

  • PitchBook, a private equity database company, shared the estimated numbers with Axios.

Why it matters: An increase in venture capital signals investor confidence in Northwest Arkansas' entrepreneurial community. Capital investment gives startups and young companies resources to grow into more mature, profitable businesses faster.

By the numbers: An estimated 94% of the statewide total for 2022 was invested in NWA companies.

  • 22 deals were reported in NWA and 10 in the Little Rock metro.
  • The data show $156.8 million was invested in NWA during the third quarter of 2022 alone.
  • The largest transactions that quarter, per Pitchbook, included: $60 million with agricultural land investment broker AcreTrader and $35 million with direct-to-consumer meat-producer Cooks Venture.

Yes, but: You'd be forgiven for a cocked eyebrow when looking at the numbers, especially in the third quarter. They're estimates, and quarterly Pitchbook data sometimes reflect deals that have already been closed.

  • This is the case with a reported $10 million raised in the first quarter for Fayetteville's OurPharma, CEO Adam Kohler told Worth. The investment was a while back, Kohler said, but a recent legal filing may have flagged it for Pitchbook's researchers.
  • AcreTrader actually closed on $40 million at the end of 2021 and then expanded that funding round to $60 million due to interest from investors. The firm received the investment, but it's not necessarily attached to its third quarter in 2022.
  • Cooks Venture — which appears to have received another $12 million in the first quarter — and software company Hivery — $20 million — did not respond to Worth's requests for verification.

Between the lines: While we wouldn't rely on the data to, say, land a Mars rover, they're directionally right. It means NWA's entrepreneurial ecosystem is truly beginning to flourish.

📈 The Shift is a regular feature to catch up quick on what's happening in Arkansas' economy and entrepreneurial ecosystem.


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