U.S. Venture Capital Swells and Spreads

Last year was a bonanza for U.S. startups. They collected more than $67 billion in venture-capital funding, a new record that beat the previous high in 2015 by more than 5 percent.

Number of Deals

3,000

2,000

1,000

0

’07

’09

’11

’13

’15

’17

Deal Value

$60

B

40

20

0

’07

’09

’11

’13

’15

’17

Number of Deals

Deal Value

3,000

$60

B

2,000

40

1,000

20

0

0

’07

’09

’11

’13

’15

’17

’07

’09

’11

’13

’15

’17

Number of Deals

Deal Value

3,000

$60

B

2,000

40

1,000

20

0

0

’07

’09

’11

’13

’15

’17

’07

’09

’11

’13

’15

’17

Silicon Valley continues to dominate the VC landscape. But its grip is slipping. Companies in the San Francisco-Oakland-Fremont metropolitan area collected $19.7 billion last year, 12 percent less than in 2015. Part of that is because Lyft Inc. and Uber Technologies, Inc., which raised the most capital in the Bay Area last year, fell short of previous landmark deals, including Uber’s $3.5 billion or Snap Inc.’s $1.8 billion, both raised in 2016. Another reason: many of the biggest deals in 2017 were based somewhere else.

Deal Values by Metropolitan Statistical Area

2015

2017

Rank

Rank/Metro area

1

1

San Francisco, CA

2

2

New York, NY

3

3

San Jose, CA

4

4

Boston, MA

5

5

Los Angeles, CA

6

6

Washington, D.C.

7

7

Chicago, IL

8

8

8

Seattle, WA

9

9

San Diego, CA

10

10

Miami, FL

11

11

Philadelphia, PA

12

Midland, TX

13

Charlotte, NC

14

Austin, TX

15

15

Provo, UT

16

16

Atlanta, GA

(tied)

16

17

Denver, CO

18

18

Minneapolis, MN

19

19

Indianapolis, IN

20

20

Salt Lake City, UT

35

54

2015

2017

Metro area/rank

Rank/Metro area

Value ($M)

San Francisco, CA

1

1

San Francisco, CA

19,655

New York, NY

2

2

New York, NY

13,347

San Jose, CA

3

3

San Jose, CA

6,926

Boston, MA

4

4

Boston, MA

5,962

Los Angeles, CA

5

5

Los Angeles, CA

3,957

Washington, D.C.

6

6

Washington, D.C.

1,671

Seattle, WA

7

7

Chicago, IL

1,570

San Diego, CA

8

8

8

Seattle, WA

1,341

Austin, TX

9

9

San Diego, CA

1,329

Chicago, IL

10

10

Miami, FL

802

Atlanta, GA

11

11

Philadelphia, PA

641

12

Midland, TX

600

13

Charlotte, NC

582

14

Austin, TX

540

Denver, CO

15

15

Provo, UT

455

Philadelphia, PA (tied)

16

16

Atlanta, GA

448

Salt Lake City, UT (tied)

16

17

Denver, CO

422

Provo, UT

18

18

Minneapolis, MN

401

Miami, FL

19

19

Indianapolis, IN

351

Minneapolis, MN

20

20

Salt Lake City, UT

323

Indianapolis, IN

35

Charlotte, NC

54

2015

2017

Rank/Metro area

Value ($M)

Rank/Metro area

Value ($M)

1

San Francisco, CA

22,287

1

San Francisco, CA

19,655

2

New York, NY

7,866

2

New York, NY

13,347

3

San Jose, CA

6,566

3

San Jose, CA

6,926

4

Boston, MA

6,264

4

Boston, MA

5,962

5

Los Angeles, CA

4,974

5

Los Angeles, CA

3,957

6

Washington, D.C.

1,474

6

Washington, D.C.

1,671

7

Seattle, WA

1,412

7

Chicago, IL

1,570

8

8

San Diego, CA

1,356

8

Seattle, WA

1,341

9

Austin, TX

936

9

San Diego, CA

1,329

10

Chicago, IL

921

10

Miami, FL

802

11

Atlanta, GA

774

11

Philadelphia, PA

641

12

Midland, TX

600

13

Charlotte, NC

582

14

Austin, TX

540

15

Denver, CO

466

15

Provo, UT

455

16

Philadelphia, PA (tied)

448

16

Atlanta, GA

448

16

Salt Lake City, UT (tied)

448

17

Denver, CO

422

18

Provo, UT

358

18

Minneapolis, MN

401

19

Miami, FL

354

19

Indianapolis, IN

351

20

Minneapolis, MN

330

20

Salt Lake City, UT

323

35

Indianapolis, IN

101

54

Charlotte, NC

31

WeWork Companies Inc.’s massive infusion of almost $6 billion in capital last year was a big reason the New York area’s total of $13.3 billion was 70 percent higher than in 2015. Twenty percent of all U.S. venture capital funding last year was based in the New York metro area, up from 12 percent in 2015.

Biggest Deals of 2017

WeWork Cos (New York) $5,960M

Lyft (San Francisco) $2,000M

Uber (San Francisco) $1,250M

GRAIL (San Francisco) $900M

Admiral Permian Res. (Midland, TX) $600M

Compass (New York) $550M

Magic Leap (Miami) $502M

Outcome Health (Chicago) $500M

SoFi (San Francisco) $500M

SpaceX (Los Angeles) $450M

WeWork Cos (New York)

$5,960M

Lyft (San Francisco)

$2,000M

Uber (San Francisco)

$1,250M

GRAIL (San Francisco)

$900M

$600M

Admiral Permian Resources (Midland, TX)

Compass (New York)

$550M

Magic Leap (Miami)

$502M

Outcome Health (Chicago)

$500M

SoFi (San Francisco)

$500M

SpaceX (Los Angeles)

$450M

WeWork Cos (New York)

$5,960M

Lyft (San Francisco)

$2,000M

Uber (San Francisco)

$1,250M

GRAIL (San Francisco)

$900M

$600M

Admiral Permian Resources (Midland, TX)

Compass (New York)

$550M

Magic Leap (Miami)

$502M

Outcome Health (Chicago)

$500M

SoFi (San Francisco)

$500M

SpaceX (Los Angeles)

$450M

The Chicago, Washington D.C. and Miami metro areas also showed big gains among the top 10. The year’s two biggest technology deals, $500 million for Outcome Health, and $502 million for Magic Leap, were based in the Chicago and Miami areas, respectively, while the Washington D.C., metro area benefited from $275 million in venture capital awarded to Precision Medical Group, a healthcare services company based in Bethesda, Maryland. A $600 million deal in Midland, Texas, and a $270 million deal in Plymouth Meeting, Pennsylvania, ensured even smaller cities got in on the VC boom, too.

Overall, startup money materialized in more places than ever. In 2015, 119 metro areas in 43 states received VC funding; 141 metro areas in 48 states are represented in the 2017 ranking.

Deal Values by MSA

0

$100M

$500M

$1B

$10B

$20B

Seattle

Portland

Minneapolis

Boston

San

Francisco

Chicago

New

York

Denver

St. Louis

Atlanta

Los

Angeles

Dallas

Houston

Miami

0

$100M

$500M

$1.0B

$10.0B

$19.7B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

San

Francisco

Cleveland

Chicago

Salt Lake City

New York

Denver

Indianapolis

Kansas City

San Jose

Washington, D.C.

Las Vegas

St. Louis

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Phoenix

Dallas

San

Diego

Atlanta

Charleston

Midland

New

Orleans

Austin

Orlando

Tampa

Houston

San

Antonio

Hilo

Miami

0

$100M

$500M

$1.0B

$10.0B

$19.7B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

Cleveland

Chicago

San

Francisco

Salt Lake City

Des Moines

New York

Washington, D.C.

Denver

Indianapolis

San Jose

St. Louis

Richmond

Kansas City

Las Vegas

Nashville

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Memphis

Phoenix

Atlanta

San Diego

Charleston

Dallas

Birmingham

Midland

New

Orleans

Jacksonville

Austin

Orlando

San Antonio

Tampa

Houston

Hilo

Miami

0

$100M

$500M

$1.0B

$10.0B

$19.7B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

Milwaukee

Detroit

Cleveland

Chicago

New York

Salt Lake City

Des Moines

San

Francisco

Pittsburgh

Columbus

Washington, D.C.

Indianapolis

Denver

San Jose

Kansas City

Richmond

St. Louis

Louisville

Las Vegas

Raleigh

Nashville

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Memphis

Phoenix

Atlanta

San Diego

Charleston

Birmingham

Dallas

Midland

Jacksonville

New

Orleans

Austin

Houston

Orlando

San Antonio

Tampa

Hilo

Miami

0

$100M

$500M

$1B

$10B

$23B

Seattle

Portland

Minneapolis

Boston

San

Francisco

Chicago

New

York

Denver

St. Louis

Atlanta

Los

Angeles

Dallas

Houston

Miami

0

$100M

$500M

$1.0B

$10.0B

$22.3B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

San

Francisco

Cleveland

Chicago

Salt Lake City

New York

Denver

Indianapolis

Kansas City

San Jose

Washington, D.C.

Las Vegas

St. Louis

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Phoenix

Dallas

San

Diego

Atlanta

Charleston

New

Orleans

Austin

Orlando

Tampa

Houston

San

Antonio

Hilo

Miami

0

$100M

$500M

$1.0B

$10.0B

$22.3B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

Cleveland

Chicago

San

Francisco

Salt Lake City

New York

Washington, D.C.

Denver

Indianapolis

San Jose

St. Louis

Richmond

Kansas City

Las Vegas

Nashville

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Phoenix

Atlanta

San Diego

Charleston

Dallas

Birmingham

New

Orleans

Jacksonville

Austin

Orlando

San Antonio

Tampa

Houston

Hilo

Miami

0

$100M

$500M

$1.0B

$10.0B

$22.3B

Seattle

Portland

Minneapolis

Boise

Boston

Buffalo

Milwaukee

Detroit

Cleveland

Chicago

New York

Salt Lake City

San

Francisco

Pittsburgh

Columbus

Washington, D.C.

Indianapolis

Denver

San Jose

Kansas City

Richmond

St. Louis

Louisville

Las Vegas

Raleigh

Nashville

Charlotte

Albuquerque

Oklahoma City

Los

Angeles

Phoenix

Atlanta

San Diego

Charleston

Birmingham

Dallas

Jacksonville

New

Orleans

Austin

Houston

Orlando

San Antonio

Tampa

Hilo

Miami

The deal sizes got bigger last year, too. Although the 2017 deal value exceeded 2015 by $3 billion, there were 224 fewer deals. The average size of all deals with disclosed values was $25.2 million, the highest in history and up from $21.5 million in 2015.

Record setting, too, was the average size of early-stage deals: $13.8 million, compared with $11.9 million in 2015. These deals, which include seed through Series B/2 capital rounds, accounted for $21.2 billion, or nearly one-third, of total VC volume, the most ever. The value of late-stage deals was the smallest since 2013.

Early Vs. Late Stage Investments

Deal volume

$40

B

30

Early stage

20

10

Late stage

0

’12

’13

’14

’15

’16

’17

Average deal size

$60

M

40

20

0

’12

’13

’14

’15

’16

’17

Deal volume

Average deal size

$40

B

$60

M

30

Early stage

40

20

20

10

Late stage

0

0

’12

’13

’14

’15

’16

’17

’12

’13

’14

’15

’16

’17

Deal volume

Average deal size

$40

B

$60

M

30

Early stage

40

20

20

10

Late stage

0

0

2012

2013

2014

2015

2016

2017

2012

2013

2014

2015

2016

2017

Despite a healthy environment for initial public offerings in general—global IPO deal count was the highest since 2007—venture-backed U.S. IPOs were scarce. Only 28 began trading in 2017, less than half 2015’s total. This attests in part to the funds companies can collect without going public: Uber, WeWork, Airbnb Inc. and Palantir Technologies Inc. have each amassed more than $2 billion.

Number of Announced IPOs by Year

80

60

40

20

0

’11

’12

’13

’14

’15

’16

’17

It also attests to the anemic performance of some of the biggest companies that have gone public. The three largest offerings in 2017 had negative returns. Snap, the biggest offering of the year and the second biggest U.S. IPO of all time, showed the worst return of the group.

IPO Offer Sizes and Returns

Sized by offer size:

$3.0B

$1.0B

$100M

IPO announcement date

J

F

M

A

M

J

J

A

S

O

N

D

Appian

Return(%)

+150

+125

Redfin

+100

Alteryx

Stitch Fix

+75

Okta

SendGrid

+50

MuleSoft

Quanterix

+25

Cloudera

Aquantia

Yext

0

Denali

Therapeutics

Snap

Tintri

–25

Restoration Robotics

Arcimoto

–50

–75

Blue Apron Holdings

IPO announcement date

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appian

Sized by offer size:

Return

$3.0B

+150

%

$1.0B

+125

$100M

Redfin

+100

Alteryx

Stitch Fix

+75

Rhythm

Pharmaceuticals

Okta

SendGrid

+50

ForeScout Technologies

G1

Therapeutics

Quanterix

Kala

Pharmaceuticals

+25

MuleSoft

Arsanis

Deciphera

Pharma

ShotSpotter

Aquantia

Yext

Sienna

Biopharmaceuticals

0

Mersana

Therapeutics

Cloudera

Snap

scPharmaceuticals

Tintri

–25

Denali

Therapeutics

Arcimoto

Aileron

Therapeutics

Restoration Robotics

–50

Blue Apron Holdings

–75

IPO announcement date

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appian

Return

Sized by offer size:

$3.0B

+150

%

$1.0B

+125

Redfin

$100M

+100

Alteryx

Stitch Fix

+75

Rhythm

Pharmaceuticals

Okta

SendGrid

ForeScout Technologies

+50

Quanterix

G1 Therapeutics

Kala

Pharmaceuticals

MuleSoft

Arsanis

+25

Deciphera

Pharmaceuticals

ShotSpotter

Yext

Aquantia

Sienna

Biopharmaceuticals

Cloudera

0

Mersana

Therapeutics

Snap

scPharmaceuticals

Tintri

–25

Denali

Therapeutics

Aileron

Therapeutics

Arcimoto

Restoration Robotics

–50

–75

Blue Apron Holdings

IPO announcement date

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appian

Return

Sized by offer size:

$3.0B

+150

%

$1.0B

+125

Redfin

$100M

+100

Alteryx

Rhythm

Pharmaceuticals

Stitch Fix

+75

Okta

SendGrid

+50

ForeScout Technologies

Quanterix

MuleSoft

G1 Therapeutics

Kala

Pharmaceuticals

Arsanis

+25

Deciphera

Pharmaceuticals

Mersana

Therapeutics

Cloudera

ShotSpotter

Aquantia

Yext

Sienna

Biopharmaceuticals

0

Snap

scPharmaceuticals

Tintri

–25

Denali

Therapeutics

Arcimoto

Aileron

Therapeutics

Restoration Robotics

–50

–75

Blue Apron Holdings

Here’s every U.S. startup in Bloomberg’s database that secured VC funding in 2017, organized by the date of the deal and the company’s industry.