SALT LAKE CITY — Even without capturing a monster $8 billion Qualtrics deal, 2018 was a banner year for Utah business capital flow dominated by tech interests and amassing over $14 billion on almost 500 major transactions.
While Provo-based survey and business analytics innovator Qualtrics announced it was being acquired by European software giant SAP last November, the all-cash deal didn't close until early 2019.
On Friday, MountainWest Capital Network released its 2018 Deal Flowanalysis, the 24th iteration of an annual report that details Utah’s capital market and the number of IPOs, investments, and mergers and acquisitions.
Deal Flow Chairwoman Katie Chandler said the 2018 Utah data is, in many ways, tracking changes also evident in the broader capital markets.
"Utah capital activity is very consistent with global trends," Chandler said. "Not as many deals as we've seen in the past, but bigger investments that are more focused on mature companies and later stage deals."
Chandler said the last few years have seen an ebb in investment exuberance focused on startup operations, with many investors opting for more caution, perhaps in light of expectations that a larger market correction could be looming.
"Many are looking at the economy and wondering when the big bust will happen," Chandler said. "We're definitely seeing a lot of private equity and venture capital firms being a lot more careful with their dollars."
Chandler said that while the report data shows some movement away from interest in early-stage investments, the burgeoning Utah venture market is helping fill those funding gaps for local startups.
"The small startups of today are having to work harder to find funding than some of their predecessors," Chandler said. "In Utah, however, we benefit from several early stage VC firms that are helping to buck that trend locally.”
The report also indicates tech and software continue to be the major drivers of the state's capital deals, accounting for almost 4 of every 10 transactions. With Qualtrics off last year's books, the biggest single deal was the acquisition of health care information technology company Cotiviti Holdings for $6 billion by health care specialists Verscend Technologies based in Waltham, Massachusetts.
Utah tech had a banner year for homegrown companies jumping into the public markets, including successful 2018 stock launches by Pluralsight and Domo. Those companies raised $311 million and $193 million, respectively, and earlier this spring, Domo re-achieved its so-called unicorn status — reaching a valuation of $1 billion or more — but has since declined a bit and had a market capitalization of about $995 million Friday afternoon.
Alpine-based Purple Innovations, makers of the Purple mattress and other comfort products, also staged a successful reverse merger in 2018 that led to a $500 million valuation for the company, according to the report.3 comments on this story
Chandler noted Utah companies with connections to the health care industry saw growth last year and accounted for 68 deals and some 14 percent of total transactions. Health care analytics company Health Catalyst was among those, scoring $55 million in funding last year and is currently setting up for a 2019 IPO.
Chandler said Utah continues to bear the benefit of its big-name successes with each deal drawing more attention to the state and with it bigger interest from both instate and outside investors.