In contrast to the SF Bay Area, New York is seeing a contraction of seed deal activity. At the current run rate, both the online and mobile sectors in NY are on track to see less seed funding in 2013 YoY.
While seed venture capital financing in the San Francisco Bay Area is on pace for a record year, investors appear to be taking the Series A Crunch a little more seriously in New York, where seed-stage investment activity looks like it will be down in 2013 relative to levels seen last year.
Investors put nearly $79M into 122 seed deals in H1 2013. While that amount is already higher than all of 2010, total seed funding for the year will fall in between 2011 and 2012 levels, barring a much stronger second half of seed investment (in 2012, 64% of seed VC dollars came in H2 so it is possible). After a 52% jump in seed deals between 2011 and 2012, deal levels appear to be flattening out at its current pace.
Peeling back seed investments and looking at them across a couple of select sectors reveals similar trends. In contrast to the 54% increase in New York Internet seed deals from 2011 to 2012, deal activity in H1 2013 versus H1 2012 actually fell 4%, and the current run rate suggests just a single-digit increase in Internet seed deals for full year 2013. While Internet seed funding jumped 87% from 2010 to 2011 and 32% in 2012, the Internet sector looks like it will bring in less seed funding in 2013 (again, assuming H2 2013 doesn’t see an explosion of seed deals).
A closer look at the mobile sector suggests a much larger dropoff for NY in this sector. After a 102% jump in dollars between 2011 and 2012, H1 2013 saw just over $18M invested, suggesting a material dip in funding for the year. Deal activity at the seed-stage for NY mobile startups appears poised for a slight dip as well, after growing 107% between 2011 and 2012.
A list of the most active seed investors since 2010 based on unique company investments in New York is below. Interestingly, large multi-stage funds a la NEA, Andreessen Horowitz and Google Ventures are notably missing from the top 10 list. The top 3 is led by NY-based seed stage fund Lerer Ventures, followed by SV Angel and the Entrepreneurs Roundtable Accelerator. (Data Integrity Note: This list omits individual investors, but does include seed accelerator programs and holding companies such as TechStars and Betaworks.)