{"id":10069,"date":"2019-11-19T15:04:28","date_gmt":"2019-11-19T20:04:28","guid":{"rendered":"https:\/\/blog.brainstation.io\/?p=10069"},"modified":"2020-03-03T16:41:19","modified_gmt":"2020-03-03T21:41:19","slug":"is-new-york-now-the-worlds-best-tech-city","status":"publish","type":"post","link":"https:\/\/brainstation.io\/blog\/is-new-york-now-the-worlds-best-tech-city","title":{"rendered":"Is New York Now the World\u2019s Best Tech City?"},"content":{"rendered":"

It would have been unthinkable even a decade ago, but after years of rapid economic growth in the Big Apple, we can now make the argument that New York has surpassed Silicon Valley as the best tech city in the world.<\/span><\/p>\n

Earlier this year, New York overtook San Francisco to rank No. 1 in the Savills Tech Cities index, which evaluates global tech hotspots in 100 individual metrics in categories, including business environment, tech environment, city buzz and wellness, talent pool, real estate costs, and mobility.<\/span><\/p>\n

\u201cNew York is our No. 1 tech city and boasts a diverse range of talent from the financial and retail sectors to support its technological offering,\u201d read the report. \u201cPrices may be high, but the opportunities are great: world-renowned universities, a business-focused culture and global links make New York attractive for start-ups and multinationals alike.\u201d<\/span><\/p>\n

This year also marked the first time that KPMG\u2019s annual Global Technology Industry Innovation Survey found more than half of respondents predicting that Silicon Valley would no longer be the technology innovation center of the world in four years. In a separate question, tech industry leaders tabbed New York as the most likely to be named top tech hub by 2023.<\/span><\/p>\n

\u201cThe belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralization of technology innovation, spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley,\u201d <\/span>said<\/span><\/a> Tim Zanni, KPMG Global and U.S. Technology Leader.<\/span><\/p>\n

We took a closer look at why many feel New York has already cemented its status as the tech capital of the world.<\/span><\/p>\n

NYC Is a Leader in VC Activity<\/b><\/h2>\n

Venture capital (VC) activity has risen higher and higher across the U.S. in recent years, but no other city matches the rate of funding growth in New York.<\/span><\/p>\n

The third-quarter 2019 Pitchbook-NVCA Venture Monitor found that New York has seen a record 17 percent of deal value year-to-date, while Startup Genome\u2019s 2019 Global Startup Ecosystem Report ranked New York as the second-highest performing ecosystem with $641,000 early-stage funding per startup and $6 billion early-stage funding total.<\/span><\/p>\n

Indeed, New York grew from just over $2 billion in total deal value in 2010 to a record-setting $14.25 billion in 2018. And Pitchbook\u2019s numbers show that 2019 is poised to take the cake, with roughly $15.63 billion worth of VC deals already in the books as of September.<\/span><\/p>\n

Major 2019 deals include the $568 million Series D funding round for UiPath, a robotics process automation startup, as well as the data mining software startup Dataminr closing a $392 million Series E round at a valuation of nearly $1.6 billion, more than double its 2015 valuation.<\/span><\/p>\n

Analysts argue that VC funding in New York hasn\u2019t even approached a plateau yet.<\/span><\/p>\n

\u201cI don\u2019t think that we have seen the apex of it at the moment\u2014I think it continues to grow,\u201d Lerer Hippeau Managing Partner Eric Hippeau <\/span>said<\/span><\/a>. “If I look at the early-stage pipeline, where we are mostly focused on, the number of companies that are looking for funding continues to grow, maybe 20-25 percent every year.”<\/span><\/p>\n

Locally based firms like Lerer Hippeau are a big reason for that continued concentration of funding in NYC. Lerer Hippeau\u2019s New York-based investments make up more than 59 percent of its business over the past decade, including such successful startups as Casper, Blade, Glossier, and Warby Parker.<\/span><\/p>\n

\"\"<\/a><\/p>\n

Meanwhile, RRE Ventures closed 209 local deals over the past decade \u2013 59 percent of its total deals \u2013 while roughly 50 percent of Boxgroup\u2019s deals were in companies based in New York.<\/span><\/p>\n

\u201cWe live in the community, we understand where the challenges are, and we are equipped to help companies with issues,\u201d Hippeau said.<\/span><\/p>\n

There\u2019s also been a rise in big-money exits. In 2018, there were 110 VC-backed exits in New York City worth a combined $9.4 billion. Five years prior in 2013, there were also 110 exits \u2013 but their combined value was only $4.3 billion. This year, Datadog\u2019s $100 million IPO was deemed one of the best IPOs in years, while local startups Peloton and WeWork also had blockbuster IPOs (even if both have since been surrounded by some uncertainty).<\/span><\/p>\n

A Startup Scene Like No Other<\/b><\/h2>\n

Of course, the reason so much VC funding has been focused on New York is simple: NYC is home to some amazing companies and entrepreneurs.<\/span><\/p>\n

According to the New York City Economic Development Corporation\u2019s recent Global Startup Ecosystems Report, the city is now the world\u2019s second highest performing ecosystem with 7,000 startups, 326,000 jobs, and over $71 billion in value.\u00a0<\/span><\/p>\n

And there\u2019s one area where New York\u2019s tech industry is unmatched: its diversity of industry.<\/span><\/p>\n

New York\u2019s startup success stories span all industries, with notable companies including:<\/span><\/p>\n