Momentum has been growing in Southern California’s tech ecosystem. Not only has the region developed a diverse array of tech startups operating in diverse markets ranging from eCommerce to mobile messaging, it has also chalked up some of the largest exits in the region’s history with Oculus VR and Maker Studios.
Unfortunately, Q1 didn’t see a closing of the funding gap with SoCal’s northern neighbors in Silicon Valley. In fact, Q1 2014 saw the widest gap in venture capital funding between Silicon Valley and Southern California (LA/San Diego) in the past nine quarters.
As the chart below highlights, VC funding in Silicon Valley (only rounds in which VCs participated) jumped to $4.87 billion, an increase of 67% from Q4’13 and a notable 93% from the same quarter last year. The huge quarter was bolstered by a number of sizable three-digit deals ranging from TangoMe to One Kings Lane to Hortonworks to Cloudera. Conversely, SoCal VC funding has remained range-bound, trending under $1B over the period with no notable recent growth.
The quarterly rift between Silicon Valley and SoCal VC deal tallies has also grown, albeit to a much smaller degree. Q1 2014 saw Silicon Valley-based companies garner 78% of all California VC deals vs. 75% in Q1’13 and 76% in Q1’12. On an absolute basis, Silicon Valley VC deal growth has outpaced SoCal by a wider amount. Compared to Q1’12, Silicon Valley VC deals grew 30% in Q1’14 vs. just 16% for SoCal across the same quarters.