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2017
Venture EcosystemFactBook:New York
Credits & ContactPitchBook Data, Inc.
JOHN GABBERT Founder, CEO
ADLEY BOWDEN Vice President,
Market Development & Analysis
ContentGARRETT JAMES BLACK Manager, Custom
Research & Publishing
HENRY APFEL Data Analyst
KORY HOANG Data Analyst
DARREN KLEES Data Analyst
JENNIFER SAM Senior Graphic Designer
Contact PitchBook pitchbook.com
RESEARCH
EDITORIAL
SALES
COPYRIGHT © 2017 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.
Introduction 3
New York in the US Venture Ecosystem 4
Economy 5
Investment Activity 6-11
Exits & Fundraising 12-13
League Tables 14
The PitchBook PlatformThe data in this report comes from the PitchBook Platform–our
data software for VC, PE and M&A. Contact [email protected]
to request a free trial.
Contents
2 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Is the New York ecosystem finally living up to hype?Introduction
Narratives tend to be hard to control. In the case of the New York venture and
startup ecosystem, most current headlines will posit that “Silicon Alley” has yet
to live up to how much it was hyped around four or five years ago. And yet, just
over a year ago, posts and articles began appearing asking and firmly answering
yes to the question of whether the area’s ecosystem was finally catching up to
the hype.
But actual, data-driven assessment of health matters more than headlines of any
sort. And, as always, candid analysis reveals a decidedly un-dramatic mixture of
yes and no when it comes to whether NY has firmly established its place as the
second-most prominent venture ecosystem in the US. Yes, investment activity in
the NY metropolitan statistical area (MSA)—which includes northern New Jersey,
it should be noted—soared to unprecedented heights in the past few years—yet
it has not escaped the general moderation of the US venture investing cycle.
Yes, NY enjoys unique advantages when it comes to talent given its sheer size,
diversity and cultural appeal—yet it remains pricey and does not yet possess
the sheer concentration of capital across the entire funding lifecycle that Silicon
Valley does...or will it soon? Will Cornell-Technion’s new venture on Roosevelt
Island help augment the engineering talent supply, eventually? There is much
to explore before forming conclusions, and in the following pages we detail
everything from venture financing by size to domestic fundraising in order to do
so.
This is just the latest entry in our series of reports focused on exploring US
venture ecosystems at a more granular level, relying most heavily on PitchBook
datasets but also including relevant figures sourced from outside providers. We
welcome your feedback and questions—reach out to us at
[email protected]. Special thanks to RRE Ventures, Braemar Energy
Ventures, Catalyst Investors and the National Venture Capital Association,
among others, all of whom assisted in the production of this report.
GARRETT JAMES BLACK
Manager, Custom Research & Publishing
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3 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
New York in the US Venture EcosystemSnapshot of the NY MSA’s size within the US venture ecosystem as a whole
In early August 2016 we released the
first US Venture Ecosystem: FactBook,
the largest PitchBook report ever and
a compendium of venture and relevant
economic datasets for the top 12 (by
overall venture activity) metro areas
within the US.
Source: PitchBook. *New York and San Jose technically tied but given San Jose’s exit value and VC invested we gave it second place. Note that PitchBook uses the US
Census Bureau definition and delineation of metropolitan statistical areas.
Note: Using data as of 6/30/2016, this ranking was generated by weighting capital raised, VC invested, VC activity and venture-backed exit value equally, tallying up their ranking in each area, then summing and sorting from lowest to highest, with a lower score indicating a larger ecosystem.
MSA*Size of VC ecosystem,
rankedTotal VC funds raised
since 2006Total VC invested since
2010Total # of VC rounds
since 2010Total exit value since 2010
San Francisco #1 $117.6 billion $101.4 billion 9,710 $90.8 billion
San Jose #2 $35.5 billion $43.3 billion 4,152 $63.5 billion
New York #3* $43.6 billion $33.9 billion 6,174 $17.6 billion
Boston #4 $41.2 billion $30.7 billion 3,664 $28.7 billion
Los Angeles #5 $2.7 billion $21.3 billion 3,403 $11.2 billion
Seattle #6 $7.6 billion $8.4 billion 1,717 $6.7 billion
Chicago #7 $3.4 billion $8.3 billion 1,348 $9.95 billion
Washington, DC #8 $4.8 billion $8.2 billion 1,416 $7.4 billion
San Diego #9 $1.5 billion $9.4 billion 1,317 $8.7 billion
Austin #10 $1.9 billion $6.6 billion 1,376 $3.7 billion
Philadelphia #11 $3.0 billion $4.8 billion 1,003 $5.4 billion
Atlanta #12 $1.15 billion $5.0 billion 837 $7.8 billion
#1
#2
#1
#3
#4
#5
#6
#7
#8
#9
#10
#11
#12
#1 #1
#2
#2 #2#4
#3
#5
#6
#7
#8
#9
#10
#11
#12
#3
#4
#5
#7
#8
#6
#9
#10
#11
#12
#4
#3
#5
#6
#7
#10
#9
#12
#11
#8
Within the US venture industry, Silicon
Valley is so predominant that in
assessing venture ecosystems broken
out by MSA it necessitated splitting
out San Francisco and San Jose. That
said, New York was still second in
terms of total capital raised by VC fund
managers, as well as total volume of
completed venture financings. Third
place for most VC invested since 2010
merely further reflects how the New
York MSA is clearly second in the
nation, after the Bay Area.
4 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Pricey but worth it?New York’s current economic condition & recent trends
When it comes to a metro area as
large and dynamic as New York’s, it’s
difficult to avoid painting with fairly
broad strokes. For the purposes of
this report, the select statistics are
primarily included to provide the
reader with a general grasp of a given
region’s economic backdrop.
The cost of living still precludes some
from considering New York City, while
its allure remains too strong for others
to resist. Data reveals that prices
have indeed remained high, while
rental rates by and large (although
there are plenty of competing reports
that ultimately only go to show how
fickle rental market numbers can be)
are still growing. That said, growth
indicators are also present, with
unemployment declining, earnings
creeping up, and GDP growth steady
even if slower on a per capita basis.
The balanced conclusion from these
disparate trends is one which many
young workers in tech or related fields
have come to over the past few years:
The opportunities available in NYC
are worth spending a lot of money on
rent. For those seeking to be socially
conscious, it is worth noting the overall
national trend of urban metro areas
becoming increasingly pricey for
middle-class and lower inhabitants
definitely holds true in NYC, with a
recent Apartment List report stating
that 54.1% of renters are cost-
burdened.
Interestingly, when it comes to the
closely related indicator of wages,
workers in the NYC tech ecosystem
earned 49% more than the average
New York metropolitan statistical area (MSA)Select
statistics
Labor force (not seasonally adjusted), New York City, July 2017 4.3 million
Portion of residents aged 25 or older holding bachelor’s degree, 2011-2015 35.7%
Population growth, 2010-2016 (est.) 4.4%
Population estimate, July 2016 8.5 million
Total private nonagricultural employment, 12-month % change, August 2017 2.4%
Change in unemployment rates, seasonally adjustedAugust ‘16-August ‘17
-0.5%
Compensation cost change for private industry, 12-month, not seasonally adjusted, June ‘16-June ‘17
3.3%
Consumer price index YoY % change, August ‘16-August ‘17 1.7%
2017 ranking for startup activity 7
2017 ranking for entrepreneurial growth 35
Average hourly earnings of private-sector employees, % change, August ‘16-August ‘17
0.9%
Current-dollar GDP % change, 2015-2016 3.1%
Per capital real GDP, % change, 2015-2016 0.7%
Overall growth ranking among largest 100 US metropolitan areas, 2010-2015
41
S&P Case-Shiller New York Home Price NSA Index, 12-month % change, July 2017
3.88%
Approximate range of change in annual fair market rents, 2-bedroom, FY 2017-FY 2018
9.3%
Sources: US Bureau of Labor Statistics, HUD FY 2017 Fair Market Rents, PayScale, Brookings Institution,
US Bureau of Economic Analysis, The Kauffman Index, New York State Department of Labor, CBRE,
National Apartment Association, Apartment List
*Note: In the preparation of this report, a survey run by RRE Ventures with distribution participation from
Union Square Ventures, Lerer Hippeau Ventures, Workbench and Corigin was consulted.
city-wide hourly wage, according to
a 2013 report per HR&A Advisors. In
addition, jobs within that ecosystem
that didn’t require bachelor’s degrees
paid 45% more than those in other
industries. Although potentially
outdated, those trends are likely to
have held true given the nationwide
competitive market for tech talent,
once again reinforcing the conclusion
that NY may be pricey, but still
worth it. Engineering roles do remain
the most challenging to fill, on an
anecdotal and survey* basis, while
talent remains a considerable barrier
to growth, so such a conclusion is
heartening for NY’s prospects, as is the
continued health of the talent pipeline
from local schools.
5 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Quarterly momentum reveals a tempered pace, with late-stage outliers in terms of VC invested
New York MSA venture activity
Source: PitchBook. *As of 9/1/2017
Factors combine to drive down earliest-stage activity
New York MSA venture activity
The cycle moderatesAn overview of New York’s venture investment activity
Early-stage competition takes toll
It is clear the venture investment cycle
in the NY metro area, much like the
US in general, has entered a stage of
moderation after its most significant
ramp-up since the dot-com era. As is
typical of the later stages of price and
sentiment cycles, players in the market
are responding to still-elevated costs
by decreasing activity at the riskiest
or earliest of stages. That isn’t the sole
driver of diminishing angel and seed
activity—increasing sophistication on
the part of founders and investors
alike have resulted in the frequency
of fundings decreasing as they grow
more targeted and data-driven in
general, among others. Meanwhile,
primarily thanks to the preponderance
of capital available to the national
venture industry, the late stage is still
seeing significant funding levels, in
a sign of a healthily correcting, not
crashing, cycle.
Source: PitchBook. *As of 9/1/2017
2009 2010 2011 2012 2013 2014 2015 2016 2017*
370 498 669 806 965 1,146 1,175 977 619
New York MSA-based companies (#) receiving venture funding
Source: PitchBook. *As of 9/1/2017
$3.2 $3.9 $3.2 $4.6 $6.8 $8.8 $8.0 $5.3
218322
406 386
539
722
864
1,053
1,250 1,261
1,029
630
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Total Deal Value ($B)
# of Total Deals Closed
Angel & Seed (#)
Early Stage (#)
Late Stage (#)
0
50
100
150
200
250
300
350
400
$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M) # of Deals Closed
6 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Highly active early-stage players
point toward more established
ecosystem down the road
Perhaps one of the clearer signs that
the New York startup ecosystem
has recently begun truly living up to
previously observed hype is the sheer
number of active early-stage investors.
Both 2014 and 2015 recorded close to
or just over 200 active accelerators,
incubators or early-stage venture
funds within the NY MSA. Of course,
such activity is not bound to persist,
as the next few years likely shall result
in a culling of the herd to at least
some degree. But even in the current
environment, wherein so much money
has been flowing to private markets,
capital doesn’t come to a startup
ecosystem without a justifiably fast-
growing base of potential enterprises
being launched, especially in such
numbers. Investors report more
frequent gatherings, tech meetups
and the like than at any other point
in the past five years, as well. Given
the broader context of the overall
investment cycle tempering, the NY
MSA tech scene is more active than in
years past, and simply experiencing
a period wherein once-fledgling
enterprises have now matured and
require nurturing alongside a still-
burgeoning crop of nascent startups
looking to meet higher hurdles.
Significant concentration at the early stage
Investors headquartered in NY MSA (#) by type, active in New York MSA
Source: PitchBook. Data pulled on 10/3/2017
Note: If a firm had >= 70% of investments tagged as early stage, they were classified as an early-stage
firm. Likewise for late stage and growth equity, with the plain VC classifier utilized if a firm’s given
portfolio composition did not reach that threshold of 70%.
0
50
100
150
200
250
300
350
2010 2011 2012 2013 2014 2015 2016
Accelerator/Incubator Growth Equity
Early-stage VC Late-stage VC
VC
Steady growth at Series A & C
VC invested ($M) in companies with at least one female
founder in New York MSA
TYPE 2012 2013 2014 2015 2016 2017*
Angel $18.4 $28.3 $21.5 $40.0 $49.5 $12.2
Seed $40.3 $49.6 $81.7 $92.8 $79.0 $38.0
A $94.5 $120.2 $307.1 $255.4 $241.1 $279.5
B $45.3 $111.5 $243.9 $334.0 $318.2 $154.6
C $130.0 $123.4 $138.1 $104.9 $238.7 $304.6
D+ $6.0 $167.3 $143.2 $484.3 $123.0 $74.7
More Series C rounds as of late, steady Series A flow
VC activity (#) in companies with at least one female
founder in New York MSA
TYPE 2012 2013 2014 2015 2016 2017*
Angel 15 23 28 36 29 9
Seed 55 62 87 65 51 19
A 32 36 52 33 30 31
B 6 11 15 23 23 8
C 2 7 5 4 9 9
D+ 1 2 4 6 4 2
Source: PitchBook. *As of 9/21/2017 Source: PitchBook. *As of 9/1/2017
Financing of female-led startups
follows overall cycle
Especially in light of the ongoing
conversation around diversity within
the VC universe, it is important to
consider trends in financing of female-
led companies. Comparisons among
various US MSAs warrant a deeper
dive that will be forthcoming in a
separate post on PitchBook News &
Analysis, but by and large, what is
interesting to note is that after peaks
of early-stage fundings of companies
with at least one female founder from
2013 to 2015, there is a decent increase
in commensurate late-stage a year or
so later, tracing aggregate investment
patterns closely.
7 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Pricing pressures hold steady
Median venture financing size ($M) in New York MSA
Valuations normalize at the latest stage
Median venture pre-valuation ($M), New York MSA
As late stage corrects, overall figures
hold at an elevated level
The distortion of financial flows in
general in an era of unprecedented
monetary policy has also positively
effected changes in the amount of
capital flowing into the US venture
industry. On top of that, as technical
development finally made good on the
starry-eyed promise of the dot-com
era, high-profile early successes both
contributed to a growing population of
angel and venture investors and also
padded their wallets. These factors in
combination have contributed to an
overall elevation of deal metrics within
the national venture industry, and as
one of the most active epicenters of
VC financing within the country, the
NY MSA is little different.
But thus far in 2017, a few things
do stand out. Firstly, at the late
stage, both median round sizes and
valuations have corrected somewhat
in the past 20 months post a 2015
peak. As early-stage figures remain
elevated, the competitive pressures
induced by both the nationwide
surplus of dry powder and growing
sophistication of founders is evident,
especially against a backdrop of
diminishing total financing volume.
The companies that can close a round
in this environment can still close
on plenty of money, in other words.
It is also worth considering that in
relatively pricey areas such as NYC,
historically, financings have trended
higher partially out of pure economic
necessity.
Source: PitchBook. *As of 9/1/2017Source: PitchBook. *As of 9/1/2017
Case study: Tracking the 98 New York MSA-
headquartered companies seeded in 2010 and follow-
on financing rates by company count & financing type
Source: PitchBook. *As of 9/1/2017. In cases where the precise series of the
financing is unknown, the stage is labeled instead.
Follow-on financing type
2011 2012 2013 2014 2015
Angel 1 2
Seed 3 1 2 1
A 24 10 5 1 1
B 2 5 10 6 3
Early stage 1 5 1 2
Late stage 1 3
CVCs stay highly involved
New York VC activity with corporate venture participation
Source: PitchBook. *As of 9/1/2017
$1.3 $1.5
$6.4$6.7
$12.3
$10.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early-stage VC Late-stage VC
$6.3 $6.7
$22.5 $24.3
$62.2$56.0
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early-stage VC Late-stage VC
$0.5
$1.2
$0.9
$1.7
$2.0
$3.1
$3.1
$2.0
58
8492
133
148
187
162
118
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($B)
# of Deals Closed
8 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Pricing pressures shift proportions upward
New York MSA VC activity (#) by round size
As cycle tempers, later-stage follow-ons are resilient
New York MSA follow-on VC activity (#) by stage
How traditional venture nomenclature
is changing
As the arguably second-largest
venture ecosystem in the US, the NY
MSA is experiencing a significant
redefinition of traditional VC
nomenclature more emphatically than
most. How the inflation of interest and
capital invested in VC has resulted in
seed rounds slowly marching upward
into traditional Series A ranges can
be observed in the breakdown of VC
Source: PitchBook. *As of 9/1/2017Source: PitchBook. *As of 9/1/2017
Traditional nomenclature has changed
New York MSA VC activity (#) by series
Follow-on VC invested suggests shifting dynamics
New York MSA follow-on VC activity ($B) by stage
Source: PitchBook. *As of 9/1/2017
Source: PitchBook. *As of 9/1/2017
activity by round size below: A steady
ramp-up in sub-$500,000 financings
by count led to a peak in 2014, yet
the proportion of $500,000-$1
million rounds stayed more resilient in
subsequent years. Moreover, fundings
in the $1 million-$5 million range have
stayed perhaps the most stable of all.
This trend has been partially driven
by sheer availability of capital and the
growing proliferation of incubators,
accelerators, angel syndicates,
and other confluxing models of
entrepreneurship and investment. As
such institutions and organizations
stay active, sophistication and resulting
competition will exert upward pressure
on deal metrics, shifting the common
parlance of series and associated
round sizes. In a related phenomenon,
NY’s success in attracting follow-on
capital speaks to its evolution into an
even more mature venture ecosystem.
0
200
400
600
800
1,000
1,200
2010 2011 2012 2013 2014 2015 2016 2017*
Under $500K $500K-$1M $1M-$5M
$5M-$10M
$10M-$25M
$25M+
0
100
200
300
400
500
600
700
800
900
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early-stage VC Late-stage VC
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early VC Later VC
0
100
200
300
400
500
600
700
800
900
2010 2011 2012 2013 2014 2015 2016 2017*
Seed Series A Series B Series C Series D+
9 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Traditional strongholds in the area stay popular
New York MSA VC activity (#) by sector
Software’s proportion holds steady
New York MSA VC activity ($) by sector
Source: PitchBook. *As of 9/1/2017
Off-pace volume, as first-time VC invested stays strong
First-time financings in New York MSA
The city environs host the most activity, still
City of New York-only venture activity
Source: PitchBook. *As of 9/1/2017
Source: PitchBook. *As of 9/1/2017 Source: PitchBook. *As of 9/1/2017
Investors remain selective as NYC
benefits from concentration of
industries
As a stronghold of multiple industries
and global center of a few, the NY
metro area benefits immensely from
a proliferation of big customers,
senior executives crossing over into
entrepreneurship, information flows
and potential for collaboration, all
key to a well-functioning startup
ecosystem. Particularly given the
moderation of the investment cycle,
such cross-collaboration proves
crucial in underpinning the supply of
enterprises suitable for VC infusion.
Anecdotally, such crossover has
become more common, likely as
the boundary between certain tech
segments and more traditional NY
industries such as finance become
blurred in fintech, among other areas.
The dynamism and sheer size of the
NY metro area in terms of population
still bode well for its ability to host a
diverse variety of startups by sector.
It is worth noting that media’s heyday
in terms of its proportion of venture
activity and dollars appears over,
but that is more due to that sector
being already completely disrupted
over the past decade than anything
else, especially as monolithic social
networks continue to encroach into
the business of news.
$452
.1
$702
.8
$558
.8
$1,0
15.7
$986
.8
$854
.9
$802
.3
$497
.1
243
332
412
447
514
420
310
186
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M) # of Deals Closed
$2.5
$3.0
$2.5
$4.0
$5.5
$7.5
$7.1
$4.9
414
591
743
893
1,102 1,077
883
525
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($B)
# of Deals Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% So�ware
Pharma & Biotech
Other
Media
IT Hardware
HC Services & Systems
HC Devices & Supplies
Energy
Consumer Goods &Recrea�onCommercial Services
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% So�ware
Pharma & Biotech
Other
Media
IT Hardware
HC Services & Systems
HC Devices & Supplies
Energy
Consumer Goods &Recrea�onCommercial Services
10 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Investment (#) by size in New York MSA-based companies
by investors HQ’d outside New York state only
Investment in New York MSA-based companies by investors HQ’d
outside New York state only
Outside investment has steadied, with
investors increasingly looking locally
Most venture ecosystems in the US
simply don’t have a fully self-sustaining
supply of domestic sources when it
comes to growth-stage capital. This
isn’t necessarily a negative, simply
an observation that early-stage firms
usually must possess connections to
enable follow-on fundings in order to
scale significantly. What’s interesting
about NY, as the second-most active
area in the US, is that the anecdotal
verdict regarding the availability
of midstage capital is quite mixed.
Most firms prefer to source funding
locally, according to a survey sourced
from various investment firms, while
obtaining capital remains the biggest
barrier to growth. Yet as datasets
below reveal, the preponderance of
outside investor participation is within
rounds in the middle of the size range,
while overall investment from outside
investors by count peaked in 2015.
In the context of a moderating
investment cycle, such trends yield
the conclusion that the NY venture
ecosystem is growing somewhat more
self-sustaining in terms of nascent and
early-stage funding. Silicon Valley-
based and other firms of sufficient size
still do play an important role when it
comes to participating in investments
intended to help companies scale at a
significant rate, however.
Source: PitchBook. *As of 9/1/2017 Source: PitchBook. *As of 9/1/2017
$639
$609
$1,0
60
$951
$1,4
78
$1,2
19
$949
$838
178 187
223
279
252
320
230190
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M)
# of Deals Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
$25M+
$10M-$25M
$5M-$10M
$1M-$5M
$500K-$1M
Under $500K
Investment ($) by size in New York MSA-based companies
by investors HQ’d outside New York state only
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
$25M+
$10M-$25M
$5M-$10M
$1M-$5M
$500K-$1M
Under $500K
11 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Healthier than headlines suggestDatasets of venture-backed exits and local venture fundraising in NY
Volume finally takes a downturn
Venture-backed exits of New York MSA-based companies
Venture-backed exits ($B) by type of New York MSA-
based companies
Venture-backed exits (#) by type of New York MSA-
based companies
A healthy if not spectacular recycling
rate
One of the commonest complaints
regarding the NY venture ecosystem is
the dearth of $1 billion+ exits. Granted,
outlier exits do play a role in narrative
formation around a given venture
scene, as well as in positive effects of
recycling capital and entrepreneurial
talent. That said, as is clear from the
aggregate post-exit value created by
VC-backed companies over the past
few years, as well as the sheer volume
of exit events, the NY MSA is posting
healthy tallies, even in the absence of
a WhatsApp or Snap. An article from
Correlation Ventures in May posited
that the East Coast was actually on par
with the West Coast when it came to
realized returns due to greater capital
efficiency. And, indeed, as PitchBook
calculations of multiples on invested
capital reveal, the NY MSA does have
a greater proportion of significantly
sized exits than may at first be
suspected.
Source: PitchBook. *As of 9/1/2017. Note: Aggregate exit post-valuations are included to better
represent the total value created by IPOs in particular. They include IPO post-valuations, which are
calculated as total shares outstanding multiplied by offering share price.
Source: PitchBook. *As of 9/1/2017Source: PitchBook. *As of 9/1/2017
$2.5
$2.0
$3.4
$4.1
$5.0
$5.5
$6.5
$4.4
52 54
95
110
99 103 103
57
2010 2011 2012 2013 2014 2015 2016 2017*
Aggregate Exit Postvalua�on ($B) # of Exits Closed
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017*
Acquisi�on Buyout IPO
$0
$1
$2
$3
$4
$5
$6
$7
2010 2011 2012 2013 2014 2015 2016 2017*
Acquisi�on Buyout IPO
12 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Exits have tended toward the larger as of late
Venture-backed exits of New York MSA-based
companies ($) by size
Fewer but larger exits by size in 2017 to date
Venture-backed exits of New York MSA-based
companies (#) by size
Fundraising still overall healthy
New York MSA venture fundraising
All that acknowledged, it is undeniable
that the impact of a multibillion-dollar
acquisition or IPO is hugely important
to a VC ecosystem, and the continued
lack thereof in NY may not hinder
as much as headlines would have it,
but certainly won’t help. In his book
Startup Communities, Brad Feld
employs a timeline of approximately
20 years for a venture ecosystem to
truly rev up—NYC is only just nearing
that timeframe, as opposed to Silicon
Valley’s multiple decades.
Fundraising bodes well
In one of the most encouraging signs
for a venture ecosystem, NY is still
enjoying the impact of recent strong
fundraising totals. Given typical fund
lifecycles, the impact of the 111 vehicles
closed from 2014 to 2016 will continue
to be considerable for years to come
across the capital stack, given the total
sum of commitments raised as well.
2017 is currently seeing diminished
volume but, in light of more recent
yearly tallies, that is more attributable
to most domestic venture firms that
were positioned to raise another fund
having already done so.
Source: PitchBook. *As of 9/1/2017
Source: PitchBook. *As of 9/1/2017 Source: PitchBook. *As of 9/1/2017
Under 1x
1-2x 2-3x 3-5x 5-10x 10-15x 15-20x 20-25x 25-30x 30x+
20.5% 11.4% 8.7% 16.0% 24.2% 8.2% 2.7% 1.8% 0.9% 4.1%
A significant portion of volume in the midrange
Percentage of New York exits separated by multiple on invested
capital (MOIC), 2006-2017*
Source: PitchBook. *As of 9/1/2017. This table recreated and updated the same
methodology as used in this article, excepting the inclusion of buyouts in this dataset.
https://pitchbook.com/news/articles/which-us-cities-generate-the-best-vc-returns
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Under $25M $25M-$50M $50M-$100M $100M-$500M
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Under $25M $25M-$50M $50M-$100M $100M-$500M
$3.2
$5.0
$1.2
$0.8 $2
.3
$4.6
$4.4
$1.6
$7.4
$5.8
$2.9
$1.7
17
24
10
13
21
20
28
20
42
28
41
23
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Capital Raised ($B)
# of Funds Closed
13 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
Lerer Hippeau Ventures 16
Greycroft Partners 14
Social Starts 11
Y Combinator 10
Female Founders Fund 10
General Catalyst Partners 10
Collaborative Fund 9
Thrive Capital 8
SV Angel 8
Kleiner Perkins Caufield & Byers
8
New Enterprise Associates 8
Most active investors in NY MSA,
2017*, across all stages
Venture capitalVenture capital, for the purposes of this report, is defined as institutional investors that have raised a fund structured as a limited
partnership from a group of accredited investors, or a corporate entity making venture capital investments.
ValuationsPre-money valuation: the valuation of a company prior to the round of investment. Post-money valuation: the valuation of a company
following an investment.
Exits
This report includes both full and partial exits via mergers and acquisitions, private equity buyouts and IPOs.
FundraisingThis report includes New York MSA-based venture capital funds that have held a final close. Funds-of-funds and secondary funds are
not included.
League tables are compiled using the number of completed VC rounds for New York MSA-based companies. To ensure your firm is accurately represented in future PitchBook reports, please contact [email protected].
CompanyDeal size
($M)Series/stage Sector
Peloton $325.0 Series E Consumer Durables
Casper Sleep $170.0 Series C Consumer Durables
Dataminr $130.0 Series D Software
Bread Operations $126.0 Series B Software
Blink Health $90.0 Series B Software
Progyny $83.1 Series B Commercial Services
Vroom $82.2 Series F Retail
Freshly $77.0 Series C Consumer Non-Durables
Kobalt Music $75.0 Series D Media
PMV Pharmaceuticals $73.7 Series BPharmaceuticals and
Biotechnology
Betterment $70.0 Series E Software
ClassPass $70.0 Series C Software
Select League TablesSelect rankings of most active investors and deals in NY
Select 2017* venture financings of companies headquartered in NY
Most recent round type
9-12 months
12-18 months
18-24 months
Angel/seed 39 73 36
A 18 36 33
B 7 20 10
C 87 181 216
Ready for the next round: companies
(#) by time since most recent round
Source: PitchBook. *As of 9/1/2017
Source: PitchBook. *As of 9/1/2017
Source: PitchBook. *As of 9/1/2017
14 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK
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