New Mexico, which attracted a mere 0.04% of U.S. venture investments last year, hasn’t historically had a reputation as a hub of tech entrepreneurship. But it may be on its way.
Over the past decade, the state, nicknamed the “Land of Enchantment,” ranked as the nation’s fastest growing region for new venture capital investment, according to a report published last week by the
Over the decade, New Mexico posted the largest increase by a long shot, according to the report, which ranked four other regions as having the next-highest 10-year growth rates: Pittsburgh (267%), Seattle (103%), Los Angeles (72%) and Washington D.C. (71%).
Much of New Mexico’s huge gain last year resulted from one deal, a $73 million late stage round for solar cell producer Advent Solar. Even without Advent, however, the state still would rank among the fastest growing regions, albeit by a smaller margin.
One reason New Mexico was able to show such a large rise in funding is that there was so little venture activity in the arid Southwestern state during the 1990s. Thomas Stephenson, a general partner at Albuquerque-based early stage investor
“It’s an overnight success. It only took 10 years to happen,” quips Stephenson, who adds that much of the recent growth is the result of efforts instituted years ago. He gives particular credit to a state program that used a portion of revenue from the extraction of oil to invest in local venture and private equity funds.
There’s no single sector that dominates the New Mexico startup scene. Clean technology, life science, semiconductor and software companies all account for sizeable percentages of total venture investment. Local investors point to the state’s two large research labs—Los Alamos Research Center and Sandia National Laboratories—along with universities and large technology employers such as Intel Corp. as key sources of deal flow.
About half of last year’s deals were seed or early stage, though later stage rounds accounted for the vast majority of dollars invested. In addition to Advent, other New Mexico-based companies securing later stage rounds last year included MIOX, a maker of water purification equipment that raised $15 million, and Aspen Avionics, a manufacturer of display devices for aircraft that raised $9 million.
“It’s still tiny and it’s starting from a very small base,” says Francine Sommers, Santa Fe-based special general partner at