The Council for Entrepreneurial Development (CED) released its Venture Report on Tuesday, evaluating all the venture capital raised in the state last year.

As expected, 2023 was not a gold-star year for private investment in startups. Although $1.6 billion seems like a hearty figure, it is a four-year low for total funding in the state. The Wilmington area, categorized as the Eastern region in the report, saw $27,783,574 in funding through nine deals.

In 2022, the Eastern region saw more than double that sum in private investment. The 2022 Venture Report shows the Eastern region gaining $73,051,502 in funding through 12 deals. Experts at Connect to Capital, a branch of CED, pointed to the lack of “mega deals” such as the $2 billion investment from Epic Games in April 2022 as a reason for smaller funding numbers in the state.

“That definitely skews things,” Hunter Young, head of capital at Connect to Capital, told the Business Journal in January about the Epic Games deal of 2022.

The report also noted that expectations for North Carolina’s fundraising have heightened since the investment boom of 2021 when the state saw $4.6 billion in funding. Fundraising of $1 billion or more is now considered the minimum level for the state, according to the report.

Young said he wouldn’t say 2023 was a “bad year” for venture capital. He said the past couple of years have been so strong that, by comparison, 2023 looks weak.

“The large deals … the $50 million plus fundraising deals, those were way down this past year, and if you do the math, and you don't have as many of those that are upper eight-figure, nine-figure fundraising deals — that matters in aggregate when you talk about the fundraising across the state,” Young said.

The Eastern region’s decrease from 2022 to 2023 was on par with that of the Research Triangle Park area. The east saw a 62% decrease, while the Triangle saw a 66% decrease. The Triad area saw the largest drop in funding, with an 87% decrease. Charlotte is the outlier region due to its increase in funding last year.

The collapse of Silicon Valley Bank in March of 2023 contributed to the lack of bullishness in investors last year, CED’s head of entrepreneurship Jay Bigelow told the Business Journal last month. After many tech investors lost money in the collapse, priorities shifted to maintaining current investments instead of finding new ones.

“We've put it in our rearview mirror, we’ve forgotten about it, but it had a huge impact on venture funding and venture-backed companies,” Bigelow said. “By the time we come out of 2023, less deals getting done for growth stage, more focus on companies being capital efficient.”

“2023 was a watershed event,” he added.

Despite investor trepidation, Young maintained that good, innovative companies with the right numbers for investors will get funded no matter where they are located, although they have to be able to shift their methods to scale properly in an area like Wilmington, he said. Workforce is an issue he foresees in Wilmington companies, so a remote workforce might have to be an option for them, he said.

Among the nine deals inked in Eastern North Carolina in 2023, five were from Wilmington. Wilmington startups Approve, Apiture, Isosceles Pharmaceuticals, Ohanafy and Releon each received venture funding last year. Financial technology company Apiture's raise was the highest, with a $10 million investment, according to Connect to Capital.