Regional Venture

Report: Utah Deal Flow Value Reaches High Even As Number Of Deals Drops

Deal flow in Utah set a new record in terms of the value of financial transactions last year, even while the number of deals took a big hit amid the COVID-19 pandemic, according to a new report from MountainWest Capital Network.

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The yearly report shows that public and private deals came out to $26.4 billion, up from $25 billion in 2019. The deal count, however, came to 289, down from 474 in 2019.

Unsurprisingly, the reason for the drop, according to MWCN deal flow chair Mike Walsh, was the COVID-19 pandemic. Walsh said he witnessed acquisitions that were close to the finish line put on hold by the buyers.

“I think a lot of what was put on pause in that first half of 2020 has accelerated in the second half and is still going on in 2021,” Walsh said in an interview with Crunchbase News.

The largest transaction in Utah last year was Blackstone’s $4.7 billion acquisition of Lehi-based The largest public debut was Vivint Smart Home’s $4.2 billion IPO.

The biggest surprise in 2020’s deal flow was the difference between the valuation and the number of deals, according to both MWCN’s Cheri Waldron and Walsh. That could be because of “greater confidence” in the state and its businesses, Waldron said.

“You would think those would be parallel, they would move in tandem, less volume and lower total valuation,” Walsh said. “But I think when you look at it, you see that a lot of these companies are maturing and growing, and justifying those higher values. So I think it makes sense as things mature here.”

Amid a record $161 billion in VC dollars invested in U.S. startups last year, Utah was one of the secondary startup markets that has seen a notable increase in venture spending. For context, the state had $831 million in venture spending in 2016, versus nearly $1.3 billion last year, a 55 percent increase, according to Crunchbase data. Recursion Pharmaceuticals’ $239 million Series D led the pack last year as the largest of the 136 deals. Last year’s total funding for VC-backed startups was up from nearly $1.2 billion in 2019.

This year is already off to a strong start for Utah, particularly because of Qualtrics’ IPO earlier this year. The company, which was acquired by SAP for $8 billion in 2018 and later spun out, raised $1.55 billion through its IPO. The Qualtrics IPO ended up being the largest public debut ever of a Utah-based company, surpassing EnergySolutions’ $690 million IPO in 2007. Qualtrics’ market cap was around $17 billion at the close of market on Friday.

Illustration: Li-Anne Dias

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