It’s no secret that despite talk of a tech bubble, the amount of money venture capitalists are willing to throw at startups isn’t showing any signs of slowing down. But a year-end report from PitchBook and the National Venture Capital Association still offered up one surprise: 2017 saw the most capital invested in startups since the height of the dotcom era.
My colleague Bérénice Magistretti and I found that the areas that are seeing the most increased interest from venture capitalists are traditional tech hubs. While the Great Lakes region saw a respectable 70 percent increase in total venture capital invested from 2013 to 2017, the West Coast saw nearly a 96 percent increase during that same time period.
The gap grows even more stark when you look at what’s driving a funding increase in a particular state or city — in smaller markets, a large round from a single company can double the amount of venture capital that market might typically raise in a single quarter. Take Shipt, the biggest success story out of Birmingham, Alabama. Shipt raised a $ 40 million round in June 2017 — the largest round raised by an Alabama startup in all of 2017. The second largest round raised by an Alabama startup in 2017, according to PitchBook and the NVCA, was IllumiCare, which raised a mere $ 3.72 million.
The good news is that as more Heartland startups secure funding — even if they are still raising less than their coastal counterparts — it increases the likelihood that the city can produce a success story. A startup that can bring thousands of tech jobs to a city, and hopefully inspire others in the city to start their own company. It’s a topic VentureBeat will be discussing at our BLUEPRINT event taking place on March 5-7 in Reno, Nevada.
As always, please send news tips or feedback to me via email and please remember to share these #HeartlandTechstories on Twitter, LinkedIn, and Facebook.
Thanks for reading,
Anna Hensel
Heartland Tech Reporter
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