Although some venture capitalists and startups alike may be leaving the Bay Area for other U.S. enclaves, Silicon Valley is still home to the biggest tech companies in the world and a stalwart in terms of commanding funding. We looked at research firm CB Insights’ State of Venture report to check out the numbers for ourselves as the year comes to an end. Note that while the numbers demonstrate trends on the whole, the data does not capture VC trends through the end of the year, so we’ll get an even better snapshot of VC funding after the new year.
According to CB Insights, Silicon Valley deals and dollars reached new highs in the third quarter of 2021, with 771 deals and $27.1 billion in funding. That's up from 637 deals and $13.4 billion in the same period a year ago.
Venture capital had a record year in 2021, and the lion’s share of investments remained in California. Silicon Valley mid- and late-stage deal share grew in 2021 too, up from 21% to 23% and from 11% to 13% respectively. Early-stage deals remain the largest chunk of Silicon Valley deal flow at 57%, slightly down from 58% last year.
A report from Mind the Bridge found that Silicon Valley has supremacy over other startup ecosystems. It's home to 7,894 scaleups, defined as tech companies that have raised over $1 million since their founding.
Scaleups based in the Bay Area raised $501.3 billion in capital, which is about half of the total capital made available to U.S. scaleups in general. That's 2.6 times more than the amount raised by European sclaeups ($195.5B) and 1.1 times higher than China ($468B). Mind the Bridge's findings also suggest that investment in startups in the Bay Area is higher than elsewhere. "Investments in Silicon Valley scaleups are 4.9 times higher than in New York, about 7 times more than in LA, 10+ times more than Boston/Cambridge and Austin, and 30+ times more than the other hubs," the report's authors write.
So far in 2021, only about 27% of U.S. VC dollars have gone to Bay Area startups, according to “Beyond Silicon Valley,” a new report co-produced by venture firm Revolution and PitchBook. Even so, it doesn’t seem to have hurt Bay Area startups’ ability to raise tons of capital.
