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New York is now consistently attracting more VC investment than Massachusetts, but California is still in a league of its own according to a new report on global venture capital activity. The quarterly Venture Pulse Report from CB Insights and KPMG shows that global VC investment for the first three quarters of 2015 ($98.4 billion) has already surpassed the total for the full year of 2014 ($88.7 billion). Tech companies are getting 75 percent of the cash.
Quarterly Deal Activity to VC-Backed Companies
CA vs. NY vs. MA, Q3’14 – Q3’15
Source: Venture Pulse, Q3'15, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) Oct. 14, 2015
More New York-based companies (123) received VC funding than those in Massachusetts (94) for the fifth consecutive quarter. That’s the second most in the U.S., but it's a distant second to California’s 459. VC activity both globally and in Silicon Valley is actually down in terms of the number of investments, but the monies involved are much larger. California topped $11 billion for the third quarter running, whilst New York edged out MA with $2.1 billion compared to $1.9 billion in Q3 2015.
“Company valuations vary tremendously by location”, wrote Conor Moore of KPMG Venture Capital Practise, in the report. “A company in the Bay Area, may get a billion dollar valuation. Yet that exact same company, with the exact same metrics and economics — but in other parts of the country — will not get that billion dollar valuation.”
Uber received $2 billion alone in 2015.
There was a similar trend in New York, which actually saw 41 fewer investments than for the same quarter in 2015 but an increase of more than $400 million. This increase was driven by big investments, the largest of which were in FanDuel ($275 million), Buzzfeed ($200 million) and ZocDoc ($130 million). The FanDuel Series E funding round was the eighth largest of the quarter nationwide. Predictably, the four biggest were all in California.
So where is all this cash coming from? Of all the VC’s investing in U.S. companies, 12 percent are headquartered in New York. The largest proportion is California (32 percent), with 28 percent coming from the other 47 states and 21 percent of VCs were from abroad.
HQ of VCs Investing in US Companies
As % of all VCs investing in US-based companies in Q3’15
North American companies received more than half ($20.3B) of the $37 billion raised worldwide. New York’s $2.1 billion is small compared with Silicon Valley, but significant when you consider that the whole continent of Europe only received $3.5 billion in VC investment.
