Med-tech trade group Medical Alley Association on Tuesday said that its 98 members raised $1.1 billion in 2019. That’s the first time they’ve cracked the $1 billion mark.

Last year’s amount marked a nearly 50 percent increase over 2018, when the association reported $736 million in funds raised.

Medical Alley officials cited Minnesota’s angel tax credit program among the reasons for the increase. The program, which allows investors to claim a 25 percent tax credit for funding tech-focused startups, was brought back in 2019 after a brief hiatus. The Minnesota Legislature authorized $10 million in credits in 2019 and another $10 million in 2021. No funding has been allocated for 2020.

“We’re absolutely concerned about the lack of [angel tax credit funding] this year,” Medical Alley spokesman Dan Wade said in an email. “Years where the credit has not been in place, we see early stage activity decline from where it otherwise would have been. We expect that to be true again in 2020.” 

Meanwhile, Minneapolis-based health insurance startup Bright Health led the pack with its record-breaking $635 million raise in December 2019, which marked the largest in the state in a decade. Now valued at $2.2 billion, Bright Health has also become Minnesota’s first “unicorn” — that is, a startup that’s raised at least $1 billion.

Having a unicorn startup in the state may send a positive signal to investors, Wade said.

“The truth is those big milestones matter to founders, to VCs, and to many people in the media,” he said. “Now that the Medical Alley community has proved the potential for rocketship growth is here, the challenge is to show we can do it consistently.”

In total, digital health startups raised $664 million last year, while medical device companies raised $356 million, marking the second highest annual total over the last five years, according to Medical Alley. Nuvaira, which makes devices to treat obstructive lung diseases, raised the greatest amount among the medical device pack with its $79 million raise in February.

Over the years, the total amount raised by Medical Alley companies has grown, generally speaking. In 2017, the association reported $759 million in total funds raised, marking a big uptick from $422 million in the prior year. Still, in 2018, Medical Alley said its members raised $736 million, a slight downturn.