For Florida-based startups, this year has marked a dramatic drop in that funding. They’ve collectively raised over $820 million in financing, from seed stage through growth stage rounds. This is a hugely troubling figure, indicating that new investment is set to reach a multi-year low. Florida has a lot going for it—a warm climate, gorgeous beaches, no state income tax, and dynamic metropolitan areas like Miami. It has so far failed to live up to the startup capital many hoped it would become.

Continuing decline in cash funding leads one to wonder what is holding Florida back from becoming one of the stars in America’s growing startup ecosystem. While some companies have secured notable investments, the overall picture indicates a struggle to attract the high-value funding rounds seen in previous years. The picture only gets worse with bad actors such as Newsmax Media. They experienced a major comeback at the start of their IPO (initial public offering) only for their stock price to plummet from there.

A number of the Sunshine State’s homegrown startups have still found success in closing funding rounds this year. These tech-based startups include ONE Amazon, a company developing cryptocurrency coins tied to efforts to protect the Amazon rainforest, which received $100 million. ThreatLocker, an Orlando-based cybersecurity company founded by first-generation Americans, announced $60 million in equity financing. Cast AI, a Miami based Kubernetes management company, closed an $108 million Series C funding round. The investors, including G2 Venture Partners and SoftBank, wrapped up the investment in late April. Plus, Reef, Kaseya, and Papa each got funding, but their individual amounts were not disclosed.

Blockchain and Cryptocurrency Funding Lagging

Despite Florida’s advantages as a gateway to Latin America, investment in Florida startups in the blockchain and cryptocurrency sectors is still minimal. In comparison, a little over $21 million in venture funding has gone to these industries this year. This paltry investment is most unexpected given the ever-increasing interest and activity in the cryptocurrency space.

This low level of funding is due to a number of reasons. Regulatory uncertainties and investor biases favoring more established tech hubs loom large. Florida’s burgeoning blockchain and cryptocurrency startup scene campaigned for access to hard cash bootstraps. This is the case even with partners such as ONE Amazon and American Bitcoin at the helm. American Bitcoin— the Eric Trump-backed subsidiary of Miami-based Hut 8 — is preparing for a SPAC merger that would take it public. Created through a merger with Gryphon Digital Mining, the transaction may generate even more interest and attention in the nascent industry.

Public Offerings and Market Volatility

In March, Boca Raton-based right-wing news outlet Newsmax Media went public. The decision was met with a sharp spike in its stock price. The company’s share price has suffered, recently hovering between $25-26 per share. Its current market capitalization is about $3 billion. As uncertainty looms over the nature of streaming wars, this volatility has further underscored the struggles of companies going public—particularly within the media landscape.

The crazy ride of Newsmax Media’s stock highlights the capriciousness of the market. The first wave of investment demonstrated huge demand from the investor community. That later drop makes clear the pressures and demands that come with being a publicly traded company. This trend is likely to buoy investor sentiment for any other Florida-based companies looking to go public.

Absence of Billion-Dollar Valuations

This is presenting a real challenge for Florida-based startups. They’re not getting the big rounds that a few years ago would have resulted in $1 billion-plus valuations on all those unicorns. The absence of any big bets shows just how far investors have changed their tune. That means that Florida’s startups are less likely to be seen as high-growth potential opportunities. In a very different funding climate, investors are increasingly becoming more risk averse. They are now focused on companies with demonstrated business models and established trajectories towards profitability.

The recent drop in large-scale funding is connected to a larger economic narrative. Soaring interest rates and fears of an impending recession are principal drivers of this trend. Investors are looking to play it safer when it comes to investing in risky startups. They would rather put money in the hands of mature and proven companies. This trend produces serious headwinds for Florida-based startups. They find it hard to compete and grow against firms located in deeper, richer tech centers.