New York’s venture capital ecosystem has grown rapidly as of late, but a recurring knock on NY has been the lack of large exits in the area. Notably, NYC had never had a $1 billion plus exit of a venture-backed company. And while it does have a good pipeline of potential tech IPO companies and strong funding growth, this missing $1B exit has served as a pretty big asterisk on the city’s VC landscape. Bill Gurley of Benchmark Capital talked about this recently at the TechCrunch Disrupt conference, where he commented that the city’s dynamic is more focused on dollars and the bottom line which results in the city not building iconic companies that go for an IPO.
But it seems that the asterisk has now been removed.
Yahoo’s $1.1B acquisition of Tumblr marked the largest venture-backed exit of a New York-based company in its history and the first to break the $1B ceiling. It, however, wasn’t the first time Yahoo has looked to Silicon Alley for a large M&A target. The online portal’s $850M acquisition of Redpoint Ventures-backed Right Media in 2007 marked the second largest New York-based exit, followed by Salesforce’s purchase of Buddy Media, backed by Greycroft Partners and SoftBank Capital, and the sale of Currenex to State Street Corp.
Overall, the list of exits conforms with New York’s reputation as a media, advertising and finance hub. Despite just two IPO exits in the top 10, Tumblr’s billion dollar exit gets this one monkey off of NY’s back and could be the start of more exits given NY’s IPO pipeline. (Click on the graphic below to enlarge the list.)
Data Integrity Note: This list does not include private equity transactions or acquisitions that took place after an initial public offering. For example, Doubleclick which is often erroneously considered a billion dollar VC exit for NYC was not as it first IPO’d, then was acquired by private equity firms JMI Equity and Hellman & Friedman and then ultimately purchased by Google for $3.1B.
Note 2: We don’t consider companies that are based in NJ or CT to be part of these NY stats primarily because NJ and CT are not part of NY. That is why exits by the likes of Indeed, Sirocco Systems, etc are not included in this data.