Outside of Silicon Valley, New York has seen the most venture-backed companies exit since 2012, over Boston and Los Angeles.
In fact, nearly half, 44%, of all the exits in the three cities over the last five years were for companies in the New York area. Boston and environs took 30% of the total, and Los Angeles came in a close third with 26%.
However, Boston bests New York with a higher share of $100M+ exits over the time period. Boston saw 42% of the $100M+ exits (among those with disclosed valuations), while 30% of the mega-exits were in New York, and the LA area took 28%. Notably, Boston also had the most VC-backed companies go public over the time period.
But LA saw a greater proportion of the biggest winners among the three metro areas. Of the top 12 exits, all $1B or larger, six were from the LA area, five were from New York, and just one was from the Boston metro area.
Legendary Entertainment, based in Burbank, California, about 10 miles north of LA proper, had the most valuable exit of any company in the three metropolises since 2012. The company was acquired by Chinese conglomerate Wanda Group in January 2016, at a valuation of $3.5B.
Using CB Insights data we looked at all of the exits that occurred in the three areas over the last five years. Our analysis considers companies that are based (at the time of exit) in locations within the greater metro areas of Boston, Los Angeles, and New York.
Our analysis focuses on the following areas:
- Annual exit trends
- Annual M&A / IPO activity
- Share of exits by sector
- Share of $100M+ exits
- The top 20 most valuable exits
Annual exit trends — New York at the top
The New York metro area has seen over 40 venture-backed companies exit annually since 2012. Last year, the Big Apple and surroundings saw 56 exits, the highest year on record. Boston overtook New York in 2014, with 51 exits but lost the lead thereafter. So far this year, LA has been beating out Boston with 27 exits through 10/11/2016.
Annual M&A/IPO activity — Boston’s IPOs at the top
Boston has seen at least four companies go public annually since 2012, and has the most IPOs overall. In 2014, Beantown and its surroundings saw 13 IPOs, the same year it briefly overtook New York for the most exits overall. IPO activity in Boston has since trended downwards with nine in 2015, and seven so far this year through 10/11/2016. In 2014, Los Angeles nearly tied with New York, at 5 IPOs, and has seen 3 IPOs so far this year.
New York has seen the most M&A activity over the time period with over 40 companies acquired annually since 2012, and over 50 since 2015. Also, LA and Boston tied for M&A activity in three out of the five years examined. So far this year, LA has seen the second-most M&As, with 25.
NYC’s exits by sector
Since 2012, New York has seen more internet-focused companies exit over any other sector. Fewer companies that exited were in the mobile and telecommunications sector, and not many healthcare companies exited in New York.
The most valuable internet company to exit in the New York metro area over the last five years was the online marketplace Jet.com, which was acquired by Walmart in August 2016, at a valuation of $3.3B. The second-most valuable internet company to exit was online crafts marketplace Etsy, which went public in April 2015, at a valuation of $1.8B. Since 2012, there have been three other $1B+ exits for internet companies in the NYC metro area: Indeed, OnDeckCapital, and Tumblr.
Boston’s exits by sector
Since 2012, Boston has seen a nearly equal share of internet and healthcare companies exit. Other sectors trailed far behind.
The most valuable healthcare exit in Boston over the time period was for the company Avila Therapeutics, which was acquired by the US-based biotechnology company Celgene in January 2012, at a valuation of $925M. The most valuable healthcare exit in Boston this year went to Intellia Therapeutics, a gene-editing company. The company went public in May, at a valuation of $617M.
Los Angeles’ exits by sector
Since 2012, Los Angeles has seen over half of its exits come from companies in the internet sector. Around 10% of companies exited in mobile and healthcare. No other sector accounted for more than 7% of LA’s exits over the time period.
The most valuable internet company to exit in LA since 2012 was Lynda.com, which was acquired by LinkedIn in April 2015 at a valuation of $1.5B. Two companies tied for LA’s most valuable exit this year. The Trade Desk went public in September, and Dollar Shave Club was acquired by Unilever in July. Both companies exited at a valuation of $1B.
Share of $100M+ exits — Boston has the most
Boston saw nearly half of the $100M+ mega-exits over the time period, New York came in second, and the LA area trailed closely behind in third. Boston’s most valuable exit was for the company Wayfair, which went public in October 2014, at a valuation of $2.4B.
Jet.com’s acquisition by Walmart in August 2016 (mentioned above) is the New York metro area’s most valuable exit. Other notable exits for the NYC metro area include: Stamford, Connecticut-based Indeed, acquired by Recruit Holdings in September 2012, at a valuation of $1.4B; OnDeck Capital, which had its IPO in December 2014, at a valuation of $1.3B; and Tumblr, which was acquired by Yahoo in June 2013, when the company was valued at $1.1B.
Legendary Entertainment’s IPO in September, 2016 (mentioned above) is LA’s most valuable exit. Other notable exits for LA include Oculus VR, which was acquired at a valuation of $2B by Facebook in March 2014, and NantHealth, which went public in June 2016, at a valuation of $1.7B.
The top 20 most valuable exits
Of the 20 most valuable exits, the Los Angeles and New York metro areas tied with seven each, Boston was close behind with six.
Of the top exits that were for $1B+ LA had six, the New York area had five, and Boston had just one.
See the full list below.
|9||OnDeck Capital||12/17/2014||$1.3B||New York|
|11||Dollar Shave Club||7/20/2016||$1B||Venice|
|11||The Trade Desk||9/21/2016||$1B||Ventura|
|14||Maker Studios||5/12/2014||$950M||Marina del Rey|
|18||Buddy Media||8/14/2012||$745M||New York|
*Only first exits of companies are included in this analysis.
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