Return to search

VC expands beyond California; WeWork lifts NY metro area

Venture capital investing expanded last year in regions beyond its traditional center in California, as GPs opened checkbooks filled with dollars eager to go to work.

In major U.S. hubs, such as metropolitan New York and Massachusetts, capital going to startups grew at a faster clip than it did in the San Francisco-Silicon Valley area.

So, too, did money earmarked for companies in the less trafficked Midwest, Southeast and Northwest.

In VC’s traditional home base — the metropolitan region from San Francisco to San Jose, broadly defined as Silicon Valley — capital still grew at a respectable 10.7 percent pace last year, according to the MoneyTree Report from PricewaterhouseCoopers and CB Insights.

This was largely due to more dealmaking in the San Francisco South Bay region encompassing San Jose, where investments jumped 57 percent, according to the report. In the North Bay around San Francisco, PwC and CB say that investments actually shrank, though a separate study from PitchBook and the National Venture Capital Association disagrees on this point.

Together, the San Francisco-Silicon Valley region accounted for 40.6 percent of venture investing in 2017, or $29.2 billion, the MoneyTree Report found.

In the New York metro area, however, investment dollars climbed a more dramatic 40.8 percent, helped by WeWork reeling in $3 billion. Of domestic venture capital, 16 percent, or $11.5 billion, went to startups in the region, the study found.

New England, including the Boston-area hub, saw investments rise 14.6 percent, also a healthy pace. The Midwest topped that with 42.2 percent growth and a total of $3.1 billion deployed during the year, only slightly more than the 40 percent growth in New England.

Impressive growth also took place in the Southeast, where dollars placed with startups grew 72.4 percent, the MoneyTree Report found.

Other places where capital increased include the Northwest, Colorado and Texas. Investments fell in the Washington, D.C., metropolitan area and in the Los Angeles-Orange County region, while they were largely unchanged in San Diego.

Photo of U.S. map with hundreds courtesy of Nelson_A_Ishikawa/iStock/Getty Images.