Minnesota startups raised $70.8 million in the third quarter, according to a recent investment report from trade group Medical Alley Association.

That marks a downturn from the same quarter last year, when the state’s startups raised $176 million.

So far this year, Medical Alley’s member companies have raised a total $332 million. That compares to $416 million over the same period in 2018.

Still, the association reported a “sharp increase” in the number of seed- and angel-stage companies that received funding. Compared to the second quarter, the number of companies raising angel rounds grew 44 percent in the third quarter, according to Medical Alley’s Q3 investment report.

In total, 22 companies claimed $1.8 million worth of angel tax credits. Of those, 11 were healthcare related.

In the report, association officials attributed the uptick to the reinstatement of Minnesota’s angel tax credit program, which was revived this year. (The program had temporarily ended in 2017.)

“In short, the early signs are quite good,” Medical Alley officials wrote in the report. “The reinstatement of the [angel tax credit program] and the founding of Launch Minnesota are two strong shows of state support for Minnesota’s angel- and seed-stage companies; there is more work to do to shore up the foundation of the startup community, but these two programs are a promising start.”

Meanwhile, Medical Alley officials noted that two new investment funds launched in the third quarter: Vensana Capital closed out its first $225 million fund, while Matchstick Ventures closed on a $30 million fund.

“The new funds represent continued positive movement in the availability of capital for Medical Alley startups at a variety of fundraising stages,” Medical Alley officials said. “Strong production for angel- and seed-stage companies with a pipeline for continued growth and two new investment funds show that the future of Medical Alley’s ecosystem is in great shape.”