California, New York, Massachusetts, Texas and Washington lead the list but there are some surprise tech hubs emerging
Silicon Valley has lost some of its aurae due to many reasons affecting the region's economic environment. But it would be innocent to say that investors completely forsake SV. Although the Bay Area has become a highly competitive business environment, it still attracts startups, venture capital firms and talent.
In the last year's VC funding analysis, we saw California outperforming and new tech hubs rising, proving their worth in a pandemic period.
So, we extract from Pitchbook the largest venture capital investments of 2021 allocated in the US states to understand how the market is being shaped.
The top 10 US states VC-backed
California showed its economic power last year by attracting no less than 97 billion dollars of venture capital investments, coming from a total of 396 deals.
New York and Massachusetts follow behind with the latter receiving $28bn from 133 deals, and the former, $22bn from 94 deals. But things start to get interesting when we look down the list and see the rise of new tech hubs like Texas, Washington...
To get a better overview, we create a map with that venture funding scenario in 2021 over the US.
The top deals from the top states
Many high-growth companies were selected and had generous funding in 2021. From healthcare services to cryptocurrency, these were the top deals that the highlighted states saw shaking their economy.
We observe that most investments continue to go to companies with technological merits. The organization may not have IT as its core activity, but it seems that tech will be a key factor of excellence regardless of the sector.
With that in mind, those regions strive to cultivate a business environment that favours the development of disruptive technologies. Let's look deep then and see how the year went and why for each of the top 10 states backed by venture funding.
Silicon Valley in California is the pinnacle of technology and needs no introduction. The largest deal in 2021 was the Series G venture funding for Robinhood. The round raised $3.4bn and was led by Ribbit Capital. With the influx of new investors into the stock market and cryptocurrency, Robinhood's investing platform has thrived during the pandemic and is now preparing for its IPO.
The tech area faces criticism for its high cost of living and predatory business environment, but still has the biggest role among the other tech hubs.
2. New York
Although the "Silicon Alley" term is now considered obsolete, it is always sexy to match the Big Apple with the "Silicon" brand. New York City is responsible for receiving most of the year's VC investments in the state (Only $100m went to Brooklyn).
The edtech, Articulate, raised $1.5bn in the largest VC New York deal of 2021. The General Atlantic fund led the deal. Its fully customizable e-learning software is one of the most pleasant tech surprises coming straight from New York City.
Massachusetts has had a lot of buzz surrounding the investments in Boston and Cambridge.
We are talking about the state that has MIT and Harvard. And we can't also forget about Kendall Square, already cited as “the most innovative square mile on earth.” Commonly praised as the home of talented scientists, researchers and bioengineers, it's no surprise to see Commonwealth Fusion Systems as the great winner of the billion-dollar deal.
"I want some 29-year-old [graduate of] MIT to punch me right in the nose and say all of GE's technologies are wrong and you're about to lose. That's the challenge.”
Jeff Immelt, former CEO of General Electric, about moving the company's HQ from Connecticut to Boston in 2016.
Texas is undoubtedly one of the tech clusters that has been getting a lot of attention recently with companies like Hewlett-Packard Enterprise moving their headquarters to Houston. HP is forecast to open its new two five-story buildings in the spring of 2022.
Houston has many universities characterised as pools of talent, which is already an asset for companies established in the city like Amazon (HQ2). As the hub is taking shape, people are now calling Houston the "Silicon Bayou".
Cities like Austin are also being recognized as centres of innovation. Tesla has already transferred his HQ there, Oracle is another one on the way. Big venture capital firms like 8VC are also not left out on this move to Austin, aka "Silicon Hills".
Source: Frame Stock Footage/Shutterstock
The Dallas-Forth Worth area (Silicon Praire) is also a tech hub in Texas, emerging as a pioneer in biotechnology and life sciences. The company highlighted in our table, Vaxxinity, has its HQ in Dallas and is being praised as a developer in combating chronic disorders through prophylactic and therapeutic vaccines.
Home of tech giants (Amazon and Microsoft), Washington is a tech hub with two cities playing a significant role in the US economy: Seattle and Redmond.
The jewel of 2021 in the state was WEconnect Health Management. Provider of a rehabilitation progress tracking app, the company raised more than $1bn on December 22, at the close of the curtains of 2021.
It's very interesting to see the pattern followed in these tech clusters like Washington, which also has a large university (Washington University) nearby where tech trends arise.
6. New Jersey
New Jersey is not left out when it comes to innovation assets like prominent colleges. Princeton University is another birthplace of future industry change-makers. But another college equally crucial to the state's economy is the Stevens Institute of Technology, in Hoboken.
Hoboken, by the way, is a growing place in the US tech scene. It is where Celsius Network, the fintech that raised $750m in 2021, is based.
We can't talk about Pennsylvania, without highlighting Philadelphia. "Philicon Valley" is another technology centre in the United States that deserves attention. It has great potential with a number of universities like University City Science Center and Drexel University, located alongside the "Avenue of Technnology".
Gopuff is one of Philly's star companies, and, in 2021, raised $1.5bn in venture funding. The organisation is building its fame in the foodtech niche with affordable delivery for users.
In terms of tech industry, Illinois is best known for its Illinois Technology and Research Corridor (I-88 Corridor), known as the home of big old companies and now the home of startups like STRATACACHE, Greenleaf Foods, viaPHOTON and et cetera.
It is there, in Chicago, where things are getting wild. The $1bn venture funding in VillageMD, a healthtech managing top care services, shows how the state and its favourite city can do to boost the US economy.
Silicon Mountain (or Silicon Flatirons) is how the Denver metro area is being called.
The Denver Tech Center plays a vital role together with the University of Colorado in attracting everything a growing tech cluster wants: talent, venture capital and knowledge spillover culture. Denver and also Boulder are being filled with startups that can now, even more, reflect a culture of collaboration between different segments that today have technology as their industrial DNA.
Source: Frame Stock Footage/Shutterstock
Sierra Space, the company with the largest deal ($1.4 billion dollars) in the state, is based in Broomfield, a city located between Denver and Boulder. The aerospace tech reverberates the ambition present in this region to open the path to new emerging sectors like quantum technology.
The Tampa Bay area, Miami...Florida is another one well-served to arise as a new tech cluster.
Recently, in Miami, we saw the creation of the South Florida Tech Hub, a welcome initiative to foster networking, support with advocacy, produce events and help with more educational content.
It's only a matter of time before we see more companies like Plant-Ag receiving a precious investment like the one in 2021. The company has an ambitious goal to track your food from field-to-plate. But with the $800 million dollars raised it became easier to do this innovation in the supply chain segment.
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Being part of an emerging tech cluster is an incredible opportunity to grow together with the help of a propitious economic environment.
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This post was written by: Raphael Santos, Content Marketing Coordinator