San Francisco and Silicon Valley have long been considered the center of the tech universe, positioning the Bay Area firmly as the startup mecca. However, the NYC tech scene has grown rapidly in the last twenty years and began to change the narrative. The “Big 4” tech companies have made NYC their second home, a trend that accelerated during the pandemic, while startups have proliferated--no longer just focused on fintech either. Talent and entrepreneurial spirit are flocking to a city already awash in capital.
VC Activity in NYC Startups Compared to SF
While SF still maintains a sizable lead, the network effects and infrastructure advantage are starting to erode. One way to measure the overall startup activity is to examine the degree of VC activity in a location. The below captures the number of rounds raised by startups in SF and NYC so far this year:
Looking specifically at the cities themself, San Francisco companies have raised 22% more rounds than the NYC startups. While a delta still remains, the New York tech scene is proving to be a more than viable launching pad for future unicorns and is starting to gain ground on its West Coast rival. (Last year SF startups had 33% more VC investments).
The gap looms slightly larger though when examining a the data in a few other ways. In terms of total funding, SF-based startups have received $20.4B in investment so far in 2021 compared to only $13.2B for ones in NYC (a 50%+ advantage). If we start to expand the geography to encompass the Bay Area and the New York metro area, the activity gap similarly increases:
In short, San Francisco still has the capital advantage over the Big Apple and it has something else: it’s just the most recognized part of the broader Silicon Valley ecosystem. While NYC startups thrive in the city proper, the surrounding areas don’t (yet) include an entrepreneurial havens like Palo Alto or San Jose.
NYC Startups that Caught Our Eye
That the conversation is shifting still matters and there are rapidly growing startups in New York helping change the narrative. In recognition of that, we wanted to call attention to 3 of the hottest startups in the NYC tech scene to watch in the coming months:
- Thirty Madison - Focused on specialized care for chronic conditions, Thirty Madison currently has 4 brands addressing ailments from hair loss to migraines. Its $140M Series C pushes it into unicorn status as the company plans keep scaling.
- Bowery Farming - A vertical farming startup, Bowery has seen massive growth during the pandemic and was recently rewarded with a massive $300M Series C. Already picked up by major grocery chains, the company plans to expand operations and further invest in R&D to help address what it sees as problems in the current agricultural system.
- Noom - Based on behavioral science, Noom is a platform designed to support its users’ health from getting fit to losing weght. Buyout firm Silverlake recently plowed in $540M in a Series F suggesting one last push before testing the public markets.
This data was put together with the VC Deals App. To explore the data further, check it out!