Changing Geography of Startups

Happy Monday :) Today we're doing a deep dive into some PrivCo data. Grab your coffee, and let's go! 🤓

Anecdotally, the pandemic generated many stories of tech employees making mass exoduses from coastal cities like SF, New York, and San Jose. Realizing through WiFI and remote work as well as no active Meetups or people-watching in Dolores park that they could do their jobs anywhere, tech employees moved away in droves. The question now concerns whether founders and their companies are moving out with them? Will there be a new New York or Mountain View, in say, Tulsa or Minneapolis?

We looked at the data of 1,158 private companies founded between 2018-2021 to see where they’re setting up shop and make predictions about upcoming cities. 

        
                       The crowd you could at expect at Dolores Park, SF, pre-pandemic

San Francisco isn’t going anywhere

Silicon Valley still dominates the funding landscape, with San Francisco birthing 201 startups that have already received $4BN in funding. Pave, founded in 2019, has already raised $325MM to provide compensation software for employers. The runner-up in SF is Fast AF, Inc., and as the name would suggest, they’ve speedily raised over $222MM and have already reached a unicorn valuation of $1.5BN for providing super-fast, no-password online buying. 

The trend towards Austin continues

The Texan town is known for "keeping it weird" has shown impressive growth in the last few years, with startups raising $386.6MM. Atlanta, GA had 13 startups raising $271.3MM with Antios Therapeutics, a pharmaceutical company, bringing in $121MM. Chicago startups raised $40MM, and Denver brought in $195MM.

Top 5 Funded Startups

• Thrasio Holdings (2018) has raised $1.74BN in Walpole, MA

• Stack Infrastructure (2019) has raised $1.4BN in Denver, CO

• Lyell Imunnopharma (2018) has raised $851MM in South San Francisco, CA

• National Resilience (2020) has raised $800MM in La Jolla, CA

• Sana Biotechnology (2018) has raised $700MM in Seattle, WA

What will attract startups?

Richard Florida, economist, and author of Rise of the Creative Class says that the exodus from coastal cities has been overblown and that the thing that attracted innovators to New York and Silicon Valley in the first place will be the same thing that brings companies elsewhere in the future: less regulation and more risk tolerance. It’s not all about taxes and talent, but rather it's about an environment where innovative people feel free to do work that matters.