Venture Capital Keeps Flowing to the Same Places
The latest data show regions outside the big VC magnets of San Francisco, Silicon Valley, New York and Boston capturing more deals, but not many more.
Keeping the money close to home.
Photographer: Steven Damron via Wikimedia Commons
Among the biggest economic stories in the U.S. over the past couple of decades has been the increasing concentration of wealth in a few “superstar” metropolitan areas. Recently, many people — myself included — have been looking hopefully for signs that maybe the situation is changing at least a little. One place to look is in the venture capital data, since VC investment presumably presages future growth. But most VC investment in 2018 went to … the same places it’s been going for a while now.
This is from the PricewaterhouseCoopers/CB Insights MoneyTree report, the fourth-quarter-2018 edition of which was released Monday. It showed 2018 to be the second-biggest year for venture capital investment in U.S. history — with the $99.5 billion invested topped only by the $120 billion ($175 billion in 2018 dollars) invested at the tail end of the dot-com frenzy in 2000. But only about 30 percent of 2018 VC investment landed outside the superstar metros of San Francisco, San Jose, New York and Boston. (The regions that PwC sorts VC activity by — the ones in the chart — aren’t the same as the metropolitan areas used in government statistical data, but these four are close-ish.) That’s down from 61 percent back in 1995, and 34 percent in 2017.