Now that we are firmly in the New Year, it is time to reflect on the year gone by and what a phenomenal year 2022 was for JumpStart Ventures. We launched JumpStart Ventures as a division of JumpStart in March 2022 to accelerate our investing activity and we are excited by the momentum. Last year, we invested $16M across 42 portfolio companies (23 new and 19 follow on).
In comparison, this number stood at $6.6M in calendar year 2021; our investments grew by over 2.4X in 2022. In this year of milestones, we also saw some of our portfolio companies get acquired—Able Software, Complion and Segmint. We appreciate the efforts of the founders and leaders of these businesses over the years for their tireless work.
As we head into 2023, our pipeline for new investments looks promising. At the same time, one of the most common themes these days is the economy and recession fears, particularly in the Tech industry (or, as clinical professor of marketing at the NYU Stern School of Business, author and entrepreneur Scott Galloway puts it—the Patagonia Vest recession). People often ask me about the “market signals” of a slowdown in investing activity. While we haven’t seen any meaningful slowdown, context is important. We invest in Seed and Series A startups in Ohio and the Midwest, where companies and our founders do more with less. Unlike the coasts, they predominantly focus on demonstrating market traction and product-market fit through revenues (except in medical device and life science companies). I was recently on a call with a West Coast-based contract CFO who works with thousands of SaaS companies. I told him about one of our portfolio companies that had raised less than $2M and were close to $40K in monthly recurring revenue. The CFO said, “your portfolio company CEO must be a rockstar based on so much progress with so little capital.” But that scenario is true of many CEOs in our portfolio and the Midwest, who manage their resources optimally to maintain stability and growth.
Our companies survived 2008 and the pandemic and will survive the current market conditions. Our founders and CEOs are gritty and know capital is scarce. They work tirelessly in an upbeat economy or during a recession, focused on demonstrating market traction and knowing that if they perform well, they will survive and thrive. We are encouraged by their progress and are excited about their growth prospects in 2023 and beyond.
Additionally, Venture Capital Funds are still raising record amounts of capital. While we all anticipate bumps along the way, foundationally strong, revenue-generating businesses will be at a distinct advantage and continue to raise the capital they need to scale.
As I often say, there is no “right time” to start a business, so now might be as good a time as any. JumpStart Ventures and many of our co-investing partners are willing to back early-stage businesses that can show sustainable growth in a capital-efficient manner. We are eager to place our bets on founders who are gritty, ambitious, passionate, and prepared to roll up their sleeves. We are working with an active pipeline of investment opportunities and anticipate significant new additions in the coming months. 2023 has indeed started positively. We believe it will be another milestone year for JumpStart Ventures.