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Changing Geography of Startups

Changing Geography of Startups
May 24, 2021

The Daily Stack is a daily private market insights newsletter by PrivCo, a private company intelligence platform. Read our previous insights.
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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

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.

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Since last week, PrivCo has added:
503 Companies | 248 Funding Activities | 119 M&A Deals

Funding & Deal Highlights:
 

 

Prodoscore raises $3MM from SNK Capital Partners

Productivity Software & Internet Services • Equity • Irvine, CA
 

Moxion Power raises $10MM from Energy Impact Partners 

Renewable Electricity & Fuels • Round A • Mill Valley, CA
 

Petalfast raises $2.8MM from Merida Capital Partners

Advertising & Marketing • Round A • Irvine, CA
 

Foundry College raises $1MM from Zanichelli Venture

Education Services • Equity • San Francisco, CA
 

Fascination raises $1MM from Angels

E-Commerce Software & Internet Services • Seed • Virginia Beach, VA
 

Informed raises $20MM from Ally Ventures

AI Software & Internet Services • Round A • San Francisco, CA
 

Zap Energy raises $27.5MM from Addition 

Industrial Products • Round B • Seattle, WA
 

ASAPP raises $120MM from Fidelity Management & Research Company

AI Software & Internet Services • Equity • New York, NY
 

Wheel Health raises $50MM from Lightspeed Venture Partners

Telehealth Software & Internet Services • Round B • Austin, TX
 

Loom raises $130MM from Andreessen Horowitz

Software & Internet Services • Round C • San Francisco, CA
 

Sunbit raises $130MM from Group 11

Technology Services • Round D • Los Angeles, CA
 

Performance Food Group acquires Core-Mark for $2.1BN

Food & Beverage Distributors • Acquisition • Westlake, TX
 

NexTech AR Solutions acquires Threedy.ai for $9.5MM

Software & Internet Services • Acquisition • Sunnyvale, CA
 

Pentair acquires Ken’s Beverage for $80MM

Commercial Equipment & Supplies Distributor • Acquisition • Montgomery, IL

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