Florida, and Miami in particular, generated a lot of hype a few years ago as a hot and low-tax hub for startup founders and investors. At the peak in 2022, nearly $9 billion flowed to Sunshine State startups.
But the buzz died down shortly after. Last year, Florida companies pulled in less than $2.6 billion in venture funding, with investment contracting much more sharply than the national average, Crunchbase data shows.
More recently, it looks like funding has stabilized some. So far this year, Florida startups have closed on just over $950 million, per Crunchbase data. That includes big rounds to companies with focus areas ranging from AI chatbots to endpoint security to remote patient monitoring.
For a sense of how funding has fluctuated, we charted out total investment to Florida startups over the past seven calendar years below.
While rounds in the multiple hundreds of millions were relatively common during the boom, they’ve since mostly disappeared.
So far this year we’ve seen just two rounds over $100 million.
The largest Florida startup funding round so far in 2024 was a $150 million Series D for Orlando-based Kore.ai, a platform for AI-enabled chatbots. Next was a $115 million April Series D for ThreatLocker, an Orlando-based cybersecurity provider.
Lavishly funded laggards
Meanwhile, among the Florida companies that raised the largest sums in the past few years, a number of prominent names haven’t performed as hoped.
The standout in the underperformer list is probably Plantation, Florida-based Magic Leap, maker of augmented reality headsets. The company raised nearly $3.5 billion in equity funding between 2014 and 2021. However, its consumer offerings never gained traction, and it has since pivoted to an enterprise focus.
Miami-based Reef is another laggard. The company, which has a business model combining cloud kitchens and parking lots, raised $1.5 billion in two rounds led or co-led by SoftBank in late 2018 and 2020. But investor interest in the cloud kitchen space, which peaked during the pandemic, has since dried up.
Enthusiasm around Yuga Labs, the NFT pioneer known for its Bored Ape Yacht Club collection, has also waned. The Miami-based company, which has a remote workforce, famously picked up $450 million in 2022 in what it called a seed round, its last reported financing. Prices of its iconic NFTs have dropped precipitously, and the company laid off staff last week.
Looking ahead
There’s no particular reason why Florida’s up-and-down startup scene can’t produce some enduring success stories. As the third-most populous U.S. state, behind California and Texas, it certainly has enough people to launch and staff startups.
Beyond Miami, the Tampa, Jacksonville and Orlando metros are also large, densely populated areas with the infrastructure to support startup hubs, including research universities, a skilled workforce and access to seed capital.
With this year off to an improved startup compared to prior quarters, there’s an optimist’s case to be made that better times lie ahead.
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