Venture capital investment exploded in a number of regions in 2019, despite the threat of a steady economic downturn.
Of course, San Francisco remains the startup epicenter of the world, excluding all other regions when it comes to invested capital. However, other regions continue to grow and use more capital than ever this year.
In Utah, a new hotbed for startups, companies like Weave, Divvy and MX Technology raised a total of $ 370 million from private market investors. In the northeast, New York City experienced record business volumes with steadily increasing average business sizes. Boston closes the decade with at least 10 deals that are over $ 100 million this year alone. And in the lovely Pacific Northwest, home to the technology heavyweights Amazon and Microsoft, Seattle is seeing a surge in VC interest in what could be a sign that the city is finally reaching its full potential.
According to the data collected by PitchBook, startups in Seattle have raised a total of $ 3.5 billion in VC funds in around 375 deals this year. That's an increase of $ 3 billion in 2018 on 346 transactions and just $ 1.7 billion in 2017 on 348 transactions. Much of the recent growth in Seattle is due to some fast growing companies.
Convoy, The digital freight network connecting truck drivers to shippers completed a $ 400 million round last month and was valued at $ 2.75 billion. The business was remarkable for several reasons. First, according to PitchBook, it was the largest venture round for a Seattle-based company in ten years. And it brought Convoy to the top of the list of the most valuable companies in the city, beating OfferUp, which invested a substantial $ 1.4 billion in Series D in 2018.
Convoy has managed to attract a number of high-profile investors, including Amazon Jeff Bezos, Salesforce CEO Marc Benioff and even Bono and the Edge from U2. The company has raised more than $ 668 million in total since its inception in 2015.
Remitly, Another company headquartered in Seattle has helped strengthen the Seattle start-up ecosystem. The fintech company, which focused on international money transfers, raised $ 135 million for Series E led by Generation Investment Management and $ 85 million in debt from Barclays, Bridge Bank, Goldman Sachs and Silicon earlier this year Valley Bank. Owl Rock Capital, Princeville Global, Prudential Financial, Schroder & Co Bank AG and Top Tier Capital Partners as well as former investors DN Capital, Naspers & # 39; PayU and Stripes Group also participated in the equity round, the value of which Remitly at almost 1 Billion dollars.
Emerging startups, including co-working space provider The Riveter, real estate company Modus and same-day delivery service Dolly, have also recently attracted investments.
A number of other factors have contributed to the long-awaited surge in venture activity in Seattle. Top companies like Stripe, Airbnb and Dropbox have engineering offices in Seattle, as well as Uber, Twitter, Facebook, Disney, and many others. Of course, this has attracted numerous engineers, a key ingredient in building a successful tech hub. Thanks to the engineering pipeline at the nearby University of Washington (call to my alma mater), there is no shortage of expertise.
There have long been many bright minds in Seattle who mainly work at Microsoft and Amazon however. The problem was a lack of entrepreneurs or those willing to end a well-paid appearance in favor of a risky company. Fortunately, venture capitalists in Seattle have made new efforts to lure corporate employees into the start-up universe. The Pioneer Square Labs that I introduced earlier this year are an excellent example of this movement. Pioneer Square Labs' mission was to promote Seattle's unique entrepreneurial DNA, and in 2015 founded, founded and funded technology companies based in the Pacific Northwest.
The PSL team of former founders and venture capitalists, including Rover and Mighty, works on the model of a startup studio AI's founder, Greg Gottesman, works together to develop and develop startup ideas, and then recruits a founding CEO from his network of entrepreneurs to run the company. Seattle is home to two of the most valuable companies in the world, but hasn't produced as many founders as expected. By eliminating some of the risk, PSL hopes to encourage potential founders such as Boundless CEO Xiao Wang, a former Amazon product manager, to build.
"The studio model is very suitable for people who are 99% there and think," Damn it, I want to start a company, "said PSL co-founder Ben Gilbert in March. “These are people who are incredible entrepreneurs, but if they weren't a catalyst for the studio, they might not have [left], "
limitless is one of several successful PSL spin-offs. The company, which helps families cope with the complicated green card process, raised a $ 7.8 million Series A earlier this year, led by the Foundry Group, to attract existing investors like Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders & # 39; Co-Op.
Institutional funds like the Madrona Venture Group in Seattle have done their part to strengthen the startup community in Seattle. Madrona launched a $ 100 million acceleration fund earlier this year, and although the company plans to go beyond its borders to find the latest deals, it remains one of the biggest advocates of the Pacific Northwest's upswing. Madrona was founded in 1995 and includes Amazon, Mighty AI, UiPath and Branch, among others.
Voyager Capital, Another Seattle-based VC raised another $ 100 million this year to invest in the PNW. Maveron, a venture capital fund co-founded by Howard Schultz, Starbucks' mastermind, raised another $ 180 million in May to invest in young startups. And recent efforts like Flying Fish Partners have provided promising local businesses with capital.
There is much more to say about this. Like the growing role of deep pocket angel investors in Seattle in expanding the start-up ecosystem or non-local investors like the best from Silicon Valley who have put money into Seattle's talents. In short, business in Seattle is finally growing thanks to top talent, new accelerator models and several replenished risk funds. Now we're waiting to see how the Seattle start-up community is using this growth phase and which startups are at the top.