Report: Venture Capital in Michigan Had Record Year, Led by Rivian in Plymouth Township

The Michigan Venture Capital Association in Novi today released its 2020 MVCA Research Report that shows the state had a record-breaking year in 2019, with 71 startups in the state receiving nearly $2.1 billion in venture capital investment, a 39-percent increase in the number of startups, and more than nine times the amount of capital over the last five years.
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Rivian R1T Truck
Michigan’s venture capital success in 2019 was due in large part to Rivian’s fundraising efforts. Rivian has developed two electric-powered adventure vehicles, including the R1T Truck (pictured). // Image courtesy of Rivian

The Michigan Venture Capital Association in Novi today released its 2020 MVCA Research Report that shows the state had a record-breaking year in 2019, with 71 startups in the state receiving nearly $2.1 billion in venture capital investment, a 39-percent increase in the number of startups, and more than nine times the amount of capital over the last five years.

A major component of the effort was the fundraising efforts of Rivian, a developer of two electric-powered adventure vehicles in Plymouth Township. The vehicles, the R1T truck and the R1S SUV, are designed on a flexible skateboard platform. The company says each vehicle will have up to 400 miles of range and a new combination of off-road utility and high performance.

No official release date for the vehicles is available, though the company previously said it plans to roll out its products later this year. The firm and Ford are working on a vehicle project using Rivian’s skateboard technology, likely on the Ford F-150. In turn, Amazon has committed to ordering 100,000 Rivian vans with expected delivery to begin in 2021.

Last year, Rivian received an equity investment of $350 million from Cox Automotive in Atlanta, a $700 million investment from Seattle-based Amazon, and a $500-million investment from Ford Motor Co. in Dearborn.

In December, Rivian reported it closed a fourth round of funding — an investment round of $1.3 billion led by funds and accounts advised by T. Rowe Price Associates Inc., Amazon, Ford, and funds managed by BlackRock.

The company has development centers in Plymouth Township, California, Canada, and England. Its manufacturing plant in Illinois, which encompasses 2.6 million square feet of space, will be used to build the vehicles. Rivian plans to launch its products in other parts of the world in 2021. It is accepting preorders.

Excluding Rivian, 70 startups received more than $515 million in venture capital investment in 2019, a  152-percent increase in startups over the past five years. The MVCA said the latter trend is on the rise. It also states Michigan is a desirable destination for venture-backed investments, especially in the life science and technology sectors.

To maintain growth, the MVCA said another successful year will come from creating a variety of strategies to keep the venture capital community engaged in the state’s economy and its potential.

“MVCA is holding webinars focused on providing valuable information that can be useful to members as well as the wider entrepreneur community,” says Ara Topouzian, executive director of the MVCA. “This includes keeping abreast of legislation that can affect businesses and monitoring new programs which may offer startups and smaller companies financial relief. In addition, Michigan venture capitalists are working with their portfolio companies to properly guide them through these troubling times and provide sound advice as they move forward.”

MVCA survey respondents estimate $1.2 billion of additional venture capital will be required to adequately fund the growth of Michigan’s 144 startup companies in the next two years. In 2019, Michigan had 1,322 angel investors, a 415-percent increase over the course of the last five years Additionally, 106 startups raised over $73.6 million from angel investors.

Key Findings from the 2020 MVCA Research Report:

  • There are 144 venture-backed startups in Michigan, an increase of 12 percent over the last five years.
  • 71 Michigan-based startups received $2.0 billion from Michigan venture capital firms.
  • There are currently 19 startup companies in Michigan led by a CEO who is a racial minority, a
  • 138-percent increase over the last six years.
  • Every dollar invested in a Michigan startup by a Michigan-based venture capital firm, it attracts
  • $45.71 of investment from outside of Michigan.
  • There are 26 venture capital firms headquartered or with an office in Michigan.
  • Total venture capital under management in Michigan is $4.3 billion.
  • 542 venture firms from outside of Michigan have invested in Michigan-based startups.
  • In Michigan, 106 startups raised over $73.6 million from angel investors.

More than 400 individuals are members of MVCA, representing over 100 organizations across the nation.

View the MVCA report, click here.

To view DBusiness magazine’s 2020 Venture Capital Report, click here.

To view DBusiness magazine’s exclusive list of more than 100 investment companies in Michigan, click here.

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