Earlier this month, Rob Go of NextView Ventures penned a post titled ‘Nobody Gets Consumer in Boston’ in which he asserts that the idea of great consumer companies only being built in Silicon Valley or New York is “total B.S.” He highlights a few Boston companies in the consumer space including recently IPO’d Care.com, home goods eCommerce co. Wayfair and Simplisafe, a home security upstart that recently announced a monster $57M Series A round from Sequoia Capital that appear to be doing quite well.
Despite the success of these 3, he finds that Boston doesn’t get enough “love on the consumer internet side” for four reasons with the main one being:
“There is one major issue at work, and it does come down to the culture and high-brow intellectualism of this market. No one wants to look stupid. And because of that, when someone does look stupid, people are quick to pile-on and be nasty and snarky.
We wondered if Go’s greater point of Boston investors behaving more timid on the consumer side was echoed in the makeup of the most well-funded venture-backed tech companies in Massachusetts. Interestingly, Paul Graham made a similar assertion in October 2007 when he wrote “Silicon Valley investors are noticeably more aggressive than Boston ones”. Has nothing changed in nearly seven years?
Based on the most well-funded Boston-area startups, consumer tech indeed gets little love.
The chart below highlights CB Insights data for the 50 most well-funded VC-backed tech companies (internet, mobile, hardware/electronics, software) in Massachusetts. While the most well-funded tech company in the state, Spark-backed Wayfair, is consumer-oriented – it is in the clear minority as 84% are not. In aggregate, enterprise companies on the list have raised a whopping $3.43B vs. $778M for the 8 consumer tech companies.
Among the most highly funded enterprise companies in Mass. are copy data management firm ActiFio, backed by over $200M from investors including Andreessen Horowitz, Greylock Partners and Tiger Global, Kleiner Perkins-backed cybersecurity firm Bit9 and Greycroft-backed ad tech company Extreme Reach.
For those in the Massachusetts market, what’s your take on the consumer tech picture in the area? Do Rob’s reasons hold true with what you’re seeing/observing in the market? Is something else making Boston a tough area for consumer tech companies? Or is this much ado about nothing?
The full list of companies included in this analysis is available on the ‘Research’ tab, after logging in to CB Insights. Note: This research is available for free to anyone who logs into CB Insights.
If you aren’t already a client, sign up for a free trial to learn more about our platform.