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Hello friends,
CI’s fiscal year has
come to a close, and summertime, road trips and baseball are in the air. It’s also the time of year when I reflect on all we’ve accomplished together over the past 12 months. This year, when I sat down to make a list of the 10 things I’m most grateful for, Michael Lewis’s Moneyball came to mind. I recently reread the best-selling book about a visionary leader, Billy Beane of the Oakland A’s, who used new ideas to win against teams that were much better funded. I was struck by how similar Billy Beane’s innovative approach to rebuilding his club is to the way that Connecticut’s government is building our state’s economy.
A professional baseball team must make sure its players remain healthy, cared for and supported, and that they aren’t tempted to leave for another team. A critically important part of the general manager’s job is to draft and sign the best young players he or she can
find, and usher the best of the best through the team’s farm system to feed players to the majors, who will go on to win pennants, delight fans and attract other top talent. (We see you, Hartford Yard Goats!)
Fourteen (and counting) Fortune 500 companies make their headquarters in Connecticut; many, including Stanley Black & Decker, The Hartford and Cigna, are iconic American institutions. Other Fortune 500s, including Travelers, Raytheon Technologies (which includes Pratt & Whitney) and Lockheed Martin (of which Sikorsky is a part) have significant operations here. These companies are the backbone of our economy. As a state, we can be proud of the major-league team we’ve put together over centuries of practice.
Like any major-league team intent on winning, Connecticut has a remarkable farm system. Our high schools and universities produce remarkable talent. In addition, our beautiful towns attract the best and brightest entrepreneurs from all
over the world who call Connecticut home. I see the role of Connecticut Innovations as that of general manager and talent scout: We identify promising founders and support them financially and professionally with the goal of building the state’s farm system, feeding the future Fortune 500. In Moneyball, Lewis writes, “A baseball team, of all things, was at the center of a story about the possibilities and the limits of reason in human affairs. Baseball . . . was an example of how an unscientific culture responds, or fails to respond, to the scientific method.” He points out that baseball, like venture capital, sees two out of 50 players/startups achieve greatness, an acceptable set of odds given the upside.
This past year, one of Connecticut’s best and brightest founders, Dr. Vlad Coric, announced his company, Biohaven Pharmaceuticals, was being acquired for $11.6B. Pfizer, which acquired the
company, plans to keep it in New Haven, turning it into a new company called New Biohaven, which will enable Vlad and his team to continue to acquire and grow new pharmaceutical targets.
Last year we reported that Alexion was purchased by AstraZeneca, another Fortune 500 company expanding jobs in New Haven. Tru Optik was acquired by Transunion, a Fortune 1000 company, and GreenWorks Lending was acquired by Nuveen/TIAA-CREF, another Fortune 500 company with a 100+ year history.
To quote Lewis again, “Goliath, dissatisfied with his size advantage, has bought David’s sling. The pleasure of rooting for David is that, while you don’t know what to expect, you stand at least a chance to be inspired.”
In each of the examples above, companies from Connecticut’s farm system joined big-league companies, leading to job growth and economic development. We at CI, as well as the other fans in the state who are watching our young companies
develop, are deeply inspired by our founders and their desire to win. To paraphrase Lewis, we all fall in love with the story, the game and the people who play it.
We also have a lot to be proud of this past year. CI invested $54.8M in 98 companies, which went on to raise more than $1.3B this year alone. This total funding by our portfolio companies set another new record, creating massive war chests that should allow them to aggressively expand and withstand economic turbulence in the current whipsawing market.
In addition to putting some serious dollars to work this year, here are the 10 things I am most grateful for in ’22, in no particular order.
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Biohaven announced its acquisition by Pfizer for $11.6B, and Pfizer committed to expanding in New Haven.
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| Sema4 was listed on the Nasdaq, boasted approximately $472M capital raise and went on to acquire GeneDX, a global leader in rare disease diagnostics, with $200M of support from institutions, including Pfizer.
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| Isoplexis, Tantalus and Rallybio also went public, raising more than $700M to fund their growth.
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Payveris was acquired by Paymentus (Nasdaq: PAY), maintained its Hartford-area jobs and generated significant returns for its founders and for CI.
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The Angel Investor Tax Credit Program was fully reserved three months early this year and generated $20 million in angel investments for early-stage companies in Connecticut. CI also co-launched a new angel group, Tidal River, whose leadership includes Annie Lamont, Alison Malloy and several other accomplished women.
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CI generated proceeds of $71M, and we received $500,000 or more back from over a dozen companies in our portfolio. This was CI’s best year ever, and we now have more capital to invest in next year’s founders and entrepreneurs. The pay-it-forward model at its finest
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CI made its first cannabis industry investment, in Connecticut-based 1906, which offers a fast-acting, low-dose cannabis product. CI also invested in a number of CPG companies this year, a new category and investment opportunity for us.
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The roster of venture firms in our fund of funds continues to grow rapidly; we’ve invested in Wheelhouse360, Acadia Capital 2, Company Capital, HSCM and Tamarack Global. Connecticut now has more than 20 venture firms, whereas five years ago we had fewer than five.
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CI stood up a virtual innovation lab, through which we will fund pilots to connect our technology companies’ solutions to our government agencies and large corporate partners, setting up win-win-win scenarios across the board.
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Logicbroker raised a round of capital from K1, a private equity/growth investor, generating a record-setting return for CI. Founder Peyman Zamani and his team did an incredible job pivoting the company and building an extraordinarily successful e-commerce company in Shelton.
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All in all, it’s been another fruitful year for Connecticut Innovations and the community we serve. On behalf of my team, we thank you for your continued support, and we look forward to partnering with you in ’23.
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