These regions have the most inbound venture capital

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These regions have the most inbound venture capital

A businesswoman talks with colleagues in a virtual meeting.

Venture capital investment broke records in 2021. Data from the PitchBook – NVCA Venture Monitor shows that venture capitalists invested $341.5 billion in U.S. companies, more than double the amount in 2020, which was also a banner year for venture capital.

Investment in US startups is mostly concentrated in 10 regions. ScoP analyzed data from PitchBook to dig deeper into venture capital investment trends in these areas during the first half, or first half, of 2022 and the years leading up to it. These 10 regions are Combined Statistical Areas as defined by the Census Bureau, with the exception of Greater Austin (which is a Metropolitan Statistical Area).

Transaction sizes and valuations have increased rapidly. In a 2021 data roundup, PitchBook analyst Cameron Stanfill said inbound investment from venture capitalists and other non-traditional investors was driving the growth. Offers too arrived faster through virtual meetings, companies raising funds more often through accelerated due diligence.

2022 hasn’t been as explosive so far, but venture capital activity still outpaces years before 2021. Startups raised $144.2 billion as of June 30, compared to $158.2 billion dollars raised in the first half of 2021. This still marks a huge increase. more than $75 billion raised in the first half of 2020 and $75.4 billion in the first half of 2019.

Seed-stage investments were particularly strong in the second quarter of 2022, according to the Venture Monitor report summary. Later-stage companies have had to lower their expectations amid stock market declines, which affects their ability to go public or price-determine private funding rounds.



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Top 10 Combined Statistical Domains for Venture Capital Investments

The top 10 regions for venture capital investments this year are hubs for technology and other major industries.

As a preeminent leader in America’s tech industry, it’s no surprise that the San Francisco Bay Area led the way in venture capital investment in the first half of the year. More than a third of the venture capital invested was in this region, according to data from PitchBook. Home to industry leaders like Facebook, Google, and Apple, the Bay Area attracts high-tech talent, some of whom are branching out to pursue their own ideas and launch new ventures. The San Francisco Bay Area is also home to large venture capital firmsincluding Y Combinator, which funded over 200 deals in the region in 2021.

Some best venture capital deals in the bay area in the second quarter of 2022 include software company Remote Technology Inc. ($300 million), sales and payment software company SpotOn Transact Inc. ($300 million) and gene therapy startup Kriya Therapeutics Inc. ($270 million of dollars).

The New York Metro and Greater Boston areas are also established technology hubs with a history of relatively high venture capital investments. Los Angeles is also booming in a major technology hub with a growing focus on media and entertainment technologies.



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American investments concentrated in major cities

Venture capital investment in the top 10 areas compared to the United States as a whole

Nearly 82% of US venture capital in the first half of 2022 was invested in the top 10 markets. This number has been in the low 80s since 2014. Prior to that, it mostly hovered in the low to mid-70s since PitchBook started reporting data in 2006.

The concentration of transactions has increased in the main markets compared to historical figures. The Bay Area’s share was 22% in 1995, rising to 36% in 2022 so far. The New York metropolitan area has seen its share rise from 3% in 1995 to nearly 14% today. This clearly shows that the technology is not yet spreading as much as some have predicted that it could at a time when virtual meetings and remote working are increasing.



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Evolution of investments compared to last year

Change in investments from H1 2021 to H1 2022 in the top 10 regions

In some cities, venture capital investments actually increased in the first half of 2022 compared to the same period last year. The four largest markets all saw declines in venture capital, but the rest of the top 10 saw gains in venture capital investing.

The largest percentage increase occurred in the Southeast Florida region, which rose from $1.6 billion to $2.5 billion. Crypto, Blockchain and Web3 Startups attracted the most investment In Miami. Nearly $1 billion in funds raised in Florida have been raised in three mega-towers, totaling over $100 million. There has also been a mix of funding rounds by companies founded in South Florida and those that have recently moved to the region.

The Seattle metro area saw the second-highest increase, with startups increasing investments from $3.5 billion to $4.5 billion. This combined statistical domain is the fifth largest for venture capital investments in 2022 so far. The Seattle metro area is home to technology leaders including Amazon and Microsoft, and serves as a major hub for Meta, Google, Apple and others. The hub is more widely known for its expertise in cloud computing. Main local investors include Madrona Venture Group, M12 (formerly Microsoft Ventures) and PSL Ventures, a branch of start-up studio Pioneer Square Labs.

This story originally appeared on ScOp and was produced and
distributed in partnership with Stacker Studio.


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