Last year couldn’t top the banner year that saw VC see 2021, at least in most geographies.
While the holy trinity of venture finance (California, New York and Massachusetts – saw massive drops (we’ll get to that tomorrow), some states actually made significant gains last year, according to Crunchbase data.
“I’m not surprised,” he said steve casefounder of Washington, D.C.-based venture firm Revolutionwhich focuses on investing outside of the main centers of Silicon Valley, New York and Boston.
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“Many of these areas laid the groundwork years ago and are seeing the fruits,” he said.
While the big three saw big declines in venture capital between 2021 and 2022, albeit still more than they saw in 2020, states like Florida and North Carolina saw substantial gains. Texas venture funding numbers were flat with 2021 levels in the state after seeing a significant increase in 2021, still impressive from most areas experienced a decline last year.
Case said that while there has been steady progress in making the geographic dispersion of venture capital more diverse, the COVID pandemic and the movement of talent have likely accelerated that trend.
Along with that, new government initiatives in sectors such as semiconductors and infrastructure and certain areas that have an edge in specific sectors that technology has moved into, such as healthcare and food technology, have also helped level the game. playing field.
the sunny state
No state was able to take advantage of those trends more than Florida. The Sunshine State saw the largest percentage increase of any state in venture capital investment between 2021 and last year.
In 2021, investors spent $7.8 billion on Florida-based startups over the course of 652 deals, according to Crunchbase. Last year, that number of companies rose 25% to $9.7 billion in 601 deals. In 2020, Florida startups only received $3.4 billion in 470 deals.
“Even we, as the biggest cheerleaders in Florida, couldn’t imagine what happened,” she said. saxon baumpartner in Florida Fundersan investment firm that focuses on Florida and the Southeast and has 96 portfolio companies.
Florida saw several large funding rounds last year in the likes of fans, citadel values Y yuga laboratories. Industries including crypto, space, gaming, and cybersecurity have started to thrive in the state.
While Florida’s start-up scene has been bolstered by a lack of state income taxes and a series of successful exits including SaberBe4, connect wise Y Reef in recent years, the state has also likely received the biggest boost from COVID migration.
During the pandemic, Florida remained much more open than parts of California and New York.
“People moved here, money moved here,” Baum said, noting that the state has the third-highest number of accredited investors behind only California and New York.
Baum also notes that many view Florida as a natural entry point into the growing Latin American market, which also makes it an attractive location.
With the company growing, Baum added that it has already seen big names enter the market in recent years. “We see Redwood, Andreessen, SoftBanketc,” he said. “We never really saw those names until recently.”
While those companies have joined the competition in deals to some degree, it has also provided more opportunities to work together.
“Yes, it is added competition, but they also want and need to collaborate,” he added.
The Tar Heel State
Although Florida saw the biggest VC gains in 2022, a year back to reality for the industry, it wasn’t the only state to see a significant uptick.
Just down the road, North Carolina also snapped out of what was a down year for most areas. The Tar Heel State saw an increase of nearly a billion dollars in venture capital earmarked for start-ups in its borders.
The numbers were helped immensely by epic games‘ Massive investment of $2 billion sony Y KIRKBI what he valued the game company at $31.5 billion.
Lister Delgadofounder and managing partner of IDEA Fund Partners in Raleigh, he said he’s seen real growth in the tech and startup ecosystem in the state, and it’s not just due to the effects of COVID.
“Clearly there has been a change,” Delgado said. “People moved here and you can look at the flow of deals.”
Unlike some regions that are seeing a relatively young tech scene thrive, Delgado points out that North Carolina has been growing sustainably in its startup scene for decades, from research and biotech outside the Research Triangle to hits. from Epic Games and the open source software giant. Red Hat.
North Carolina’s numbers are definitely moving in a positive direction. Startups in the state received about $3.5 billion in venture capital through 241 deals in 2020. Those numbers rose to $4 billion through 285 deals in 2021.
However, the state saw an even bigger jump, 24%, last year, while most other regions posted declines. Meanwhile, North Carolina startups received $4.9 billion in 234 deals.
Delgado said he’s already seeing more money coming into the state from other states, and like Florida, he’s seeing bigger names, including world tiger, Bessemer Venture Partners Y battery companies being more active.
Tiger, for example, was involved with the Raleigh-based analytics firm hung upThe $150 million Series F in 2021.
Enterprise software, deep tech, artificial intelligence and fintech provide substantial growth areas for North Carolina, Delgado said.
“It’s very diverse,” Delgado added. “Only the diversity of approach [of startups] is incredible.”
The Lone Star State
Sometimes, in a year that isn’t quite up to its predecessor, it’s not just the areas that are making a profit that count. It is also important to note those that held steady and did not return the previous massive jumps.
Texas fits exactly on that bill. Venture funding for startups in the Lone Star State increased 105% between 2020 and 2021, from $5 billion to $10.3 billion, according to Crunchbase data. Last year, Texas startups saw about the same, actually a small 1% increase, which is especially notable since Texas’ venture economy trails only that of the big three states.
“It was an interesting year here,” he said. morgan standard bearerAustin-based firm managing partner Silverton Partners, which has more than $500 million under management. “It was kind of a year of two halves. The first half was definitely a carryover from 2021.
“The second half softened up,” he added.
Not surprisingly, the two largest rounds: Securonix raise a billion dollars and Elon Musk‘s the boring company landing $675 million, both of which occurred in the first half of last year.
While Texas has welcomed its share of big tech companies in recent years, including Hewlett Packard Company Y OracleFlager said the tech ecosystem can still continue to grow in the state, though perhaps not at the same rate that places like Austin have grown in recent years thanks in part to COVID and other cultural changes.
Healthcare IT, financial technology and enterprise software are leading upward trending growth, along with a significant influx of talent over the years.
“I don’t think we’re going to take a step back,” he said. “There are too many tailwinds. But it will be interesting to see what happens with the pace.
“A place like Austin cannot continue to have increases in its population like it did in 2021,” Flager added. “But it will continue to grow.”
Illustration: Dom Guzmán
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