TLDR:
- Oregon startups saw a significant decline in venture capital investment in 2023, with funding dropping by more than half compared to the previous year.
- This is the second consecutive year that venture activity in Oregon has declined by around 50%.
Oregon startups raised a total of $460 million in 2023, the lowest amount since 2017, according to data from the National Venture Capital Association and PitchBook. The decline in venture capital investment is indicative of a lack of promising new businesses and potential long-term profitability in the state. Oregon’s venture capital fall has been steeper than the national average, with investment dropping by 30% in 2022 and another 30% in 2023.
Unlike Washington and California, startups have never played a major role in Oregon’s economy. The state lacks a concentration of wealthy investors and major research universities that spin out valuable innovations. Oregon’s focus on electronics and computer hardware has not aligned with recent software-based innovations. High-profile startups like ESS Tech and Expensify floundered after going public, and few promising new companies emerged.
However, there were a few bright spots among Oregon’s startups in 2023. For example, Beaverton-based YorLabs raised $17.3 million and is developing a new medical imaging system that is more affordable and efficient. Phylos Bioscience, based in Portland, raised $8.2 million for marijuana seed lines that produce consistently productive plants. Portland marketing technology startup Ignition raised $8.0 million.
Overall, the decline in venture capital investment highlights the challenges faced by Oregon’s startup ecosystem. The state’s lack of wealthy investors and major research institutions, as well as its mismatched focus on hardware rather than software, have contributed to the decrease in funding for ambitious young companies.
