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Midwest health care startups raise $792m25/04/2007. Source: BioEnterprise.
 Midwest health care startups reported $792m in total investments in 2006, according to the Midwest Health Care Venture Investment Report released by BioEnterprise. The total represents a 25 percent increase over 2005, a significant jump that outpaces national industry growth.
“2006 was the breakout year for the Midwest as a whole: a record amount of financing across 135 separate companies, a number of successful public offerings, and several significant exits through acquisitions,” said Baiju R. Shah, President of BioEnterprise. “Venture capitalists are increasingly finding rewarding investment opportunities in the Midwest and we expect the momentum built in 2006 will continue into 2007 and beyond.”
Minnesota, the Midwest’s traditional leader in health care ventures, led all states with 22 startups attracting $233.9 million in investments in 2006. A number of Minnesota medical device companies raised more than $20 million each last year, including Anulex, Atritech, Cardiovascular Systems, CVRx, Disc Dynamics, and Enteromedics. Following Minnesota was Michigan with $135.5 million raised by 11 companies. Several Michigan biotechnology startups attracted significant investment, including NanoBio and Cerenis Therapeutics. Ohio finished third in the Midwest with $113.9 million raised by 39 companies, including many seed and early-stage financings.
The report aggregates venture investment in 10 Midwest states and Western Pennsylvania. Following the leaders are Illinois ($101.6 million), Western Pennsylvania ($54.4 million), Kentucky ($51.4 million), Missouri ($39.2 million), Indiana ($37.2 million), and Wisconsin ($25.2 million). States with no reported financings included Iowa, Kansas, and West Virginia. In terms of Midwest regions, Minneapolis-St. Paul and Chicago led the pack, followed by Detroit-Ann Arbor, Cleveland, and Pittsburgh.
By sector, the equity funding was allocated as follows:
Medical device companies: $356 million (45 percent)
Biopharmaceutical companies: $349 million (44 percent)
Health care software and service companies: $88 million (11 percent)
“The region is reaping the benefits of a number of programs that have been put in place to stimulate health care venture activity,” said Shah. “The region has always been rich in research and industry assets. That rich base is now translating into a growing stream of high quality health care start-ups due to progressive policies and programs such as state investments in research institutions, creation of new capital sources, and professional technology development groups.”
BioEnterprise is a business formation, recruitment, and acceleration effort designed to support the growth of bioscience companies. Located in Cleveland, BioEnterprise provides management counsel and support services to health care companies.
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