Oregon venture capital falls to 7-year low

Investment in Oregon’s startups continued to fade last year, dropping to the lowest point since 2017.

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The state’s entrepreneurs raised $555 million during 2024, an 8% decline from the prior year and a steep fall from the $2.7 billion venture capitalists invested in Oregon in 2021. That’s according to the latest numbers from the National Venture Capital Association and the investment data firm PitchBook.

Entrepreneurs seek venture capital in hopes of rapidly transforming small businesses into big ones. Most such businesses flame out, but investors are continually on the hunt for the next big idea.

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Oregon startups that raised big sums last year include internet security firm Eclypsium, online data management company Hydrolix and telehealth firm Boulder Care, all of which posted $35 million rounds.

Venture capital has never been a major component of Oregon’s economy, and few of the state’s young companies grow into large, enduring businesses. Remote work has further eroded the local impact of venture capital because many young companies are populated by employees doing their jobs from other parts of the country, or other parts of the globe.

Nevertheless, Oregon’s startup scene is a constantly churning source of ideas and ambition, and venture capital brings hundreds of millions of dollars to the state each year.

Nationally, venture activity picked up during 2024. The NVCA/PitchBook numbers show investors completed $209 billion in deals, up 30% from the prior year (though still below the 2021 peak of $255 billion).

The venture capital association said few startups are cashing out with big paydays, either by selling to larger firms or by taking their companies public.

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The association said inflation and resulting increases in interest rates created an “unfriendly environment” for the buying and selling of young companies. Investors rely on proceeds from those transactions to make fresh investments and so the slow pace of firm exits is holding up new investment.

“For now, the market is in wait, and fundraising and dealmaking figures do not yet signal material increases in activity,” the NVCA wrote in its annual report.

It forecast a slow recovery beginning in 2025 with interest rates falling, stocks climbing and a more relaxed attitude toward antitrust enforcement from the incoming Trump administration, which could make it easier to complete acquisitions.

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.

— Mike Rogoway covers Oregon technology and the state economy. Reach him at [email protected].

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