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Local startup funding plunges 30 percent amid market rout

People walk past the Nasdaq MarketSite, on July 13, 2022, in New York. Companies hit the brakes on deal-making during the first half of 2022 as concerns over pervasive inflation, interest rate hikes, and the threat of a recession loomed over Wall Street.Julia Nikhinson/Associated Press

Massachusetts startups raised $12.5 billion in venture capital in the first half of the year, marking a 30 percent decline from a year earlier amid the plunging stock market, rampant inflation, and weakening economy.

A total of 505 local companies raised money in the first half of 2022, a 15 percent decline from 2021, according to data released Thursday by PitchBook and the National Venture Capital Association. Among the largest deals of the year, Wakefield-based Agilitas raised $350 million to expand its clean energy storage business, and Boston-based Biofourmis, which is developing a platform for virtual healthcare, raised $300 million.

While the S&P 500 Index lost 20 percent in the first half of the year, tech-sector stocks — often used as a benchmark for venture-backed startups — lost 27 percent. A year ago, tech stocks were hitting new heights and Massachusetts startups raised a record $17.8 billion in the first half of 2021, more than had been raised in any prior full year.

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The 2022 drop in local fundraising was more severe than in California and New York, the only two states where companies raised more money than in Massachusetts. California startups raised $68 billion in the first half, down 12 percent from 2021. And New York startups raised $19 billion, down 13 percent.


Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him on Twitter @ampressman.