From advertising and media to fashion and finance, New York is often referred to as a "capital of the world." And now with the help of venture capital investors, New York is home to a thriving tech startup scene seeking to disrupt or enrich those very industries.
Since the start of 2009, venture capital investors have poured over $8 billion into 1205 transactions involving NY-based startups. When we compare the data to other U.S. venture markets, New York emerges as the only major geographic hub that grew its share of VC deals and funding to tech companies over the past three years. And while still smaller than Silicon Valley, New York looks to be the only market with enough momentum to eventually (in the medium- to long-term) overtake Silicon Valley as a venture capital hub.
The 112-page New York Venture Capital Almanac gives you the most comprehensive view of the New York venture capital market and the notable players within it that's ever been done. It covers:
Below is a summary of some of the findings. But for all the details, download the entire 112-page report. It's free.
VC and Angel Financing Trends in NY
New York venture capital investments are booming. Since the start of 2009, New York startups have raised over $8 billion across 1205 deals. And New York's financing volume continues to grow at a good clip. In fact, 2012 saw 137% more deals and 103% more dollars invested in NY than 2009.With $1.3 billion already invested in the first half of the year, 2013 is on pace for highs in both venture capital deal and funding levels in New York.
The majority of deal activity and growth in New York is coming at the early-stage (Seed/Series A). In fact, New York saw a record number of seed deals in 2012, as seed deal share ballooned to 34%. In 2013, early stage deals in New York continue to be strong, comprising over 1/2 of deals in the first half of the year.
Peeling back deal activity by sector shows the dominance of Internet startups in NY. The Internet sector claimed 7 of every 10 NY deals in H1 2013, after taking 67% of all deals in New York last year. But mobile deal share is also growing and captured 15% of all NY deals in 2012, after taking just 5% in 2009.
Exit Trends in NY
New York-based exit activity is also growing steadily as acquirers take notice of the companies in the region. But acquisitions are not the only form of exits that NY companies are taking as several companies have IPO'd or appear to be poised for the public markets as part of the IPO pipeline. 2012 saw over 50 IPO or M&A exits, a 120% jump from 2010 levels. And assuming mid-year exit levels remain steady, New York should see a similarly high number of exits in 2013.
In 2013, New York recorded its largest venture-backed exit of all time in Yahoo's acquisition of Tumblr. New York's five largest venture-backed exits since 2009 are listed below (Note: A list of the 10 largest exits is available in the 112-page report).
Tumblr (Acquired by Yahoo)
Buddy Media (Acquired by Salesforce)
Ascend Health (Acquired by Universal Health)
Tremor Video (IPO)
With New York's exit activity growing, several venture investors are also doing well. Bessemer Venture Partners and SoftBank Capital lead the list of investors who have realized the most New York-based exits over the time period covered in the report. Bessemer's NY-based exits include OMGPOP (acquired by Zynga) and Hunch (acquired by eBay), while Softbank Capital counts the Huffington Post and Buddy Media in its NY exits. The top five investors based on their NY exits are below (A list of the top 20 investors can be found in the full report.)
1. Bessemer Venture Partners
1. Softbank Capital
3. Lerer Ventures
4. Spark Capital
4. Greycroft Partners
Venture Capital & Angel Investor League Tables
With investments in many of New York's hottest consumer upstarts including BuzzFeed, Rap Genius and Warby Parker, Lerer Ventures is the most active venture capital investor in New York-based startups since 2009. Another NY-based firm, RRE Ventures, takes second in terms of activity followed by early-stage fund First Round Capital which is officially headquartered in Pennsylvania but which made a prescient bet to establish a presence in NY before the area really hit its stride.
First Round Capital
Interestingly, the most active NY investors frequently share deal flow with firms based in Silicon Valley and have strong syndicate relationships with their left coast peers. Lerer Ventures, for example, has completed nearly 50 deals with SV Angel and has made investments in several Y-Combinator-backed startups. (Note: Investor syndicate dashboards for the top 20 most active VC investors in NY can be found in the report.)
Angel investing has also become increasingly popular in New York, driven by several extremely active investors in the New York tech scene. With investments including Harry's Razor Company and Barkbox, David Tisch's Box Group tops the list of most active angels since 2009 and is followed by the New York Angels.
1. Box Group (David Tisch)
2. New York Angels
3. David Cohen
4. Golden Seeds
4. Chris Dixon
As previously mentioned, seed investments have blossomed significantly in New York. In fact, between 2009 and June 2012, 15 different investors seeded five or more unique NY-based companies. Of the 15 most active NY seed investors, Softbank Capital leads the list of investors in terms of its seed investments having the highest rate of receiving follow-on investment. New York-based firms FirstMark Capital and Lerer Ventures round out the top three. (Note: A full ranking of the 15 firms can be found in the report.)
1. Softbank Capital
2. FirstMark Capital
3. Lerer Ventures
3. First Round Capital
5. Social Leverage
Most Well-Funded NY Tech Startups
Fueling the growth in New York's tech startup scene are several firms that have raised massive amounts of funding and may go on to provide further momentum to the ecosystem with a future IPO. In fact, the top 20 most well-funded NY tech startups have raised over $2.2 billion in aggregate, while the top 5 most well-funded NY tech startups, listed below, have collectively raised over $950 million. (Note: A list of the top 20 most well-funded NY tech startups can be found in the full report.)
The Most Well-Funded New York Tech Startups
We're really excited to be partnering with Silicon Valley Bank and Orrick to offer the comprehensive New York Venture Capital Almanac to the ecosystem of startups, investors and advisors that have quickly made New York a venture hub.
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Photo credit: Sarah Ackerman