Jun 26, 2018 | Techcelerate Ventures |
1 Global metro areas and their tech companies Global Tech Hubs Report 2 Contents 3 4 5 7 12 15 17 Who Made the Cut? Our Tech Hubs: 25 Metro Areas Executive Summary 2018 Tech Hubs Compared Who’s Up, Who’s Down? Defining Our Tech Hubs Heavyweight Hubs 25 33 42 49 53 55 High Growth Hubs Up and Comers The Rise of Asia The Exit Strategy Tech Hubs That Didn’t Make It This Year Methodology 3 Who made the cut? 4 O U R T E C H H U B S 25 Metro Areas A M S T E R D A M A U S T I N B E N G A L U R U B A R C E L O N A B E I J I N G B E R L I N B O S T O N D E N V E R L O S A N G E L E S L O N D O N M U M B A I N E W D E L H I N E W Y O R K P A R I S S Ã O P A U L O S E A T T L E S E O U L S H A N G H A I S T O C K H O L M S I L I C O N V A L L E Y S Y D N E Y T E L A V I V T O K Y O T O R O N T O V A N C O U V E R 5 What We Found S I L I C O N V A L L E Y S T I L L O F F T H E C H A R T S Since 2012, Silicon Valley- based tech companies brought in a total of 12K deals, followed by New York- area based companies with 5K. For funding, Silicon Valley companies brought in a total of $140B with Beijing next coming in at $75B. B U T B E I J I N G A N D S H A N G H A I A R E C A T C H I N G U P Beijing and Shanghai are poised to be the tech hubs of the future. They lead among high-growth hubs for unicorns, mega-rounds, and large exits. Company creation is accelerating. E X I T S R E T U R N $ $ $ T O C A L I F O R N I A , L O N D O N , B E I J I N G Globally, Silicon Valley saw 4x more $100M+ exits than the next hub, NY. Hubs with the most large exit counts also included London, LA, and Beijing. Refer to Report Methodology on Slide 55. E X E C U T I V E S U M M A R Y 1 2 3 6 What We Found S O F T B A N K : K E Y I N A S I A ’ S R I S E The Japanese tech holding company’s portfolio includes more than 65 companies in our Asian hubs, showing how a single investor has propelled the rise of tech in Asia, particularly China and South Korea. T E L A V I V I S T H E M O S T I N T E R N A T I O N A L More than 2/3 of funding deals to startups in Tel Aviv involve foreign investors. Other emerging hubs like São Paulo also benefit from a high percentage of international investors. S H A N G H A I A N D B E I J I N G S E E M E G A - E X I T S Outsized returns help funnel new capital into an ecosystem, as investors don’t want to miss out on the next big exit. JD.com and Alibaba were among the largest exits globally in the period studied and will fuel more resources and talent. Refer to Report Methodology on Slide 55. E X E C U T I V E S U M M A R Y 4 5 6 7 2018 Tech Hubs Compared 8 Beijing- and Shanghai-based tech companies take on Silicon Valley 2 0 1 8 T E C H H U B S C O M P A R E D Beijing and Shanghai are ramping up to compete with Silicon Valley fundraising levels, buoyed by large rounds to hot startups like Didi, Toutiao, Mobike and Ele.me. Silicon Valley Beijing NY Shanghai $140B C U M U L A T I V E D O L L A R S T O H U B S J A N 2 0 1 2 – M A Y 2 0 , 2 0 1 8 $72B $36B $23B 9 0 2000 4000 6000 8000 10000 12000 Silicon Valley still plays a dominant role Since 2012, Silicon Valley metro area companies saw 12K deals spread out amongst 7K unique companies — more deals to tech than all non-US metro hubs combined. 2 0 1 8 T E C H H U B S C O M P A R E D 0 2000 4000 6000 8000 10000 12000 Silicon Valley 12,337 deals New York 5,252 deals 12127 12000 Full scale London 2,982 deals LA 2,659 deals See full scale at right *Jan 2012 – May 20, 2018 10 0 10 20 30 40 50 60Beijing and Shanghai ramp up with high unicorn numbers Values are for tech unicorns only; No tech unicorns: Austin, Tokyo, Mumbai, Toronto, Denver, Vancouver, Barcelona, Tel Aviv, Sydney 2 0 1 8 T E C H H U B S C O M P A R E D T E C H U N I C O R N S B Y M E T R O R E G I O N A S O F M A Y 2 0 , 2 0 1 8 60 See full scale at right 0 10 20 30 40 50 60 Full scale Silicon Valley 57 unicorns Beijing 29 unicorns New York 13 unicorns Shanghai 11 unicorns 11 Beijing and Shanghai unicorn creation has lately been hot on the heels of Silicon Valley Values are for tech unicorns only; No Tech unicorns: Austin, Tokyo, Mumbai, Toronto, Denver, Vancouver, Barcelona, Tel Aviv, Sydney. U N I C O R N S B Y M E T R O R E G I O N T E C H U N I C O R N S B O R N I N Q 1 2 0 1 8 12 Who’s Up? Who’s Down? 13 Key Investment growing outside of California W H O ’ S U P ? W H O ’ S D O W N ? P E R C E N T C H A N G E I N F U N D I N G T O S T A R T U P S 2 0 1 4 – 2 0 1 5 V S 2 0 1 6 – 2 0 1 7 GROWTH DECLINE 14 Key Stockholm stands out for high deals growth W H O ’ S U P ? W H O ’ S D O W N P E R C E N T C H A N G E I N D E A L S T O S T A R T U P S 2 0 1 4 – 2 0 1 5 V S 2 0 1 6 – 2 0 1 7 GROWTH DECLINE 15 Defining The Tech Hubs B R E A K D O W N S 16 D E F I N I N G O U R T E C H H U B S 17 Heavyweight Hubs D E E P D I V E 18 Heavyweight hubs B R E A K D O W N S : D E F I N I N G O U R T E C H H U B S C H A R A C T E R I S T I C S Lower/stable growth rates Fewer new companies entering the market Higher concentration of later stage rounds High density of engineering hiring Higher rates of follow-on deals to startups 670 Average deal count 2012 – 2017 $38B Average dollar amount raised 2012 – 2017 19 0 500 1000 1500 2000 2500 2012 2013 2014 2015 2016 2017 Deals plateau for these traditional hubs E Q U I T Y D E A L S 2 0 1 2 – 2 0 1 7 D E E P D I V E : H E A V Y W E I G H T H U B S Tel Aviv New York Silicon Valley Los Angeles London Boston 20 0% 4% 8% 12% 16% 20% 0 100 200 300 Tel Aviv has large exits with little previous funding Bubble size indicates aggregate total funding of companies at exit. First exits only. D E E P D I V E : H E A V Y W E I G H T H U B S Tel Aviv has fewer exits than many hubs, but 14% of all exits in the city are valued above $100M. Silicon Valley has well over 200 exits at the $100M+ level. Large exits are the best indicator of a healthy tech ecosystem. SIL ICON VALLEY PERCENTAGE SHARE OF TOTAL EXITS VALUED OVER $100MTEL AVIV NEW YORK LOS ANGELES BOSTON COUNT OF EXITS VALUED OVER $100M LONDO N B E T W E E N T H E Y E A R S O F 2 0 1 2 – 2 0 1 7 21 Tel Aviv attracts a high number of US- and Europe- based investors, leading to a high proportion of foreign investor-backed deals. Tel Aviv attracts a lot of foreign investors D E E P D I V E : H E A V Y W E I G H T H U B S 0% 25% 50% 75% 100% Tel Aviv London Silicon Valley New York Boston Los Angeles percent of rounds with no foreign investors percent of rounds with foreign investors F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 22 F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 percent of rounds with no corporate investors percent of rounds with corporate investors* Known for its cybersecurity and enterprise software companies, Tel Aviv is not surprisingly a standout for corporate investors. Corporate investors favor Tel Aviv *Corporate investors include corporate venture capital arms. D E E P D I V E : H E A V Y W E I G H T H U B S 0% 25% 50% 75% 100% Tel Aviv Silicon Valley Boston New York Los Angeles London 23 Notable companies *Total raised reflects the total equity amount raised by companies. D E E P D I V E : H E A V Y W E I G H T H U B S UBER INFOR SPACEX DELIVEROO HEADQUARTERS San Francisco New York City El Segundo (LA Metro) London TOTAL RAISED* $15B $2.6B $1635M $958M VALUATION $68B $10B $18.5B $2B RECENT INVESTOR(S) SoftBank Group, Sequoia Capital Koch Industries Founders Fund Accel, DST Global CATEGORY Mobile → Travel App Internet → Finance Management Industrial → Robotics Internet → Food Delivery MOSAIC SCORE 940 790 860 890 24 158 40 30 19 13 2 0 20 40 60 80 100 120 140 160 Silicon Valley New York Los Angeles London Boston Tel Aviv Silicon Valley shows strength in mega-rounds R O U N D S G R E A T E R T H A N $ 1 0 0 M S I N C E 2 0 1 4 D E E P D I V E : H E A V Y W E I G H T H U B S 25 High Growth Hubs D E E P D I V E 26 High growth hubs B R E A K D O W N S : D E F I N I N G O U R T E C H H U B S C H A R A C T E R I S T I C S Higher frequency of early startups entering the market Higher dollar investment and deal count growth rates Higher concentration of early-stage companies High rates corporate-backed deal-making in Asia 171 Average deal count 2012 – 2017 $14B Average dollar amount raised 2012 – 2017 27 0 100 200 300 400 500 600 2012 2013 2014 2015 2016 2017 Beijing and Shanghai see growth skyrocket D E E P D I V E : H I G H G R O W T H H U B S E Q U I T Y D E A L S T O P R I V A T E T E C H C O M P A N I E S 2 0 1 2 – 2 0 1 7 Seattle Beijing Shanghai Paris Bengaluru Tokyo 28 Beijing and Shanghai lead on exits Not surprisingly, Beijing and Shanghai tech companies tend to raise a lot of money and end up highly valued at exit. Since 2012, Beijing has seen over 30 large exits, with JD.com, the logistics tech giant, seeing an IPO valued at about $26B. Shanghai is clocking in at nearly 20 exits valued over $100M. The size of the bubbles show aggregate amounts raised before exit for tech companies in each metro. Beijing and Shanghai also dominate there. Bubble size indicates total funding before exit. First exits only. D E E P D I V E : H I G H G R O W T H H U B S 0% 5% 10% 15% 20% 25% 30% 0 10 20 30 40 BEIJ ING SHANGH AI SEATTLE AUSTIN TORONTO PARIS BENGALURU NEW DELHI BERLIN TOKYO PERCENTAGE SHARE OF TOTAL EXITS VALUED OVER $100MCOUNT OF EXITS VALUED OVER $100M B E T W E E N T H E Y E A R S O F 2 0 1 2 – 2 0 1 7 29 Berlin sees a lot of foreign investors D E E P D I V E : H I G H G R O W T H H U B S percent of rounds with no foreign investors percent of rounds with foreign investors 0% 25% 50% 75% 100% F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 US hubs like Austin and Seattle see relatively little foreign investor participation showing how US tech hubs tend to be less cosmopolitan in investor terms 30 Tokyo’s tech market sees prolific investment from corporate investors including Toyota and Hitachi. Tokyo and corporates, a love story *Corporate investors include corporate venture capital arms. D E E P D I V E : H I G H G R O W T H H U B S 0% 25% 50% 75% 100% F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 percent of rounds with no corporate investors percent of rounds with corporate investors* 31 Notable companies *Total raised reflects the total equity amount raised by companies. D E E P D I V E : H I G H G R O W T H H U B S lU.COM DIDI BLABLACAR OLACABS HEADQUARTERS Shanghai Beijing Paris Bengaluru TOTAL RAISED* $1.7B $15B $335M $3.6B VALUATION $18.5B $56B $1.6B $3.7B RECENT INVESTOR(S) Ping An Ventures, Bank of China SoftBank Group Baring Vostok Capital Partners SoftBank Group, Tencent Holdings CATEGORY Internet → Lending Mobile → Travel Mobile → Travel Mobile → Travel MOSAIC SCORE 730 850 760 860 32 Beijing and Shanghai dominate in mega-rounds R O U N D S G R E A T E R T H A N $ 1 0 0 M S I N C E 2 0 1 4 D E E P D I V E : H I G H G R O W T H H U B S 128 58 21 18 11 5 4 4 1 Beijing Shanghai Bengaluru New Delhi Berlin Paris Austin Seattle Tokyo 33 Up and Comers D E E P D I V E 34 Up and comers B R E A K D O W N S : D E F I N I N G O U R T E C H H U B S C H A R A C T E R I S T I C S Lower deal counts than other hubs Lower dollar investment High percentage of first-time funding rounds High foreign investment rates 75 Average deal count 2012 – 2017 $2.5B Average deal amount 2012 – 2017 35 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017 Seoul and Stockholm emerge from the pack E Q U I T Y T E C H D E A L S 2 0 1 2 – 2 0 1 7 D E E P D I V E : U P A N D C O M E R S Stockholm Mumbai Sydney Seoul Vancouver São Paulo 36 Bolstered by Atlassian’s IPO in 2014 at $1.1B and Freelancer.com’s IPO at $1B, Sydney, Australia-based tech companies have seen a relatively high percentage of valuable exits. The Denver and Stockholm areas have seen the most exits of $100M+ or more. Stockholm clearly leads in aggregate funding raised by startups before exit. Sydney’s tech exits propped up D E E P D I V E : U P A N D C O M E R S 0% 2% 4% 6% 8% 10% 0 2 4 6 8 10 Bubble size indicates total funding raised before exit. First exits only. STOCKHO LM SYDNEY SEOUL SÃO PAULO BARCELONA VANCOUVE R DENVER MUMBAI AMSTERDAM PERCENTAGE SHARE OF TOTAL EXITS VALUED OVER $100MCOUNT OF EXITS VALUED OVER $100M B E T W E E N T H E Y E A R S O F 2 0 1 2 – 2 0 1 7 37 0% 25% 50% 75% 100% Stockholm and São Paulo draw foreigners D E E P D I V E : U P A N D C O M E R S percent of rounds with no foreign investors percent of rounds with foreign investors F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 Again, a US tech hub stands out for less foreign investor participation. 38 Asian hubs tend to see more corporate activity D E E P D I V E : U P A N D C O M E R S 0% 25% 50% 75% 100% *Corporate investors include corporate venture capital arms. F U N D I N G R O U N D S 2 0 1 2 – 2 0 1 7 percent of rounds with no corporate investors percent of rounds with corporate investors* Seoul’s game development companies have seen notable interest from corporates including China-based Tencent and Line Corp. 39 Notable companies D E E P D I V E : U P A N D C O M E R S *Total equity raised by company COUPANG KLARNA LETGO SCYTL HEADQUARTERS Seoul Stockholm Naarden (Amsterdam Metro) Barcelona TOTAL RAISED* $1.8B $334M $475M $127M VALUATION $5B $2.5B $1B N/A RECENT INVESTOR(S) Fidelity Investments, BlackRock Visa, Permira NEA, Accel Adams Street Partners, Sapphire Ventures CATEGORY Online → Coupons Online → Payments Online → Ecommerce/Chat Online → Government Management MOSAIC SCORE 780 910 740 620 40 8 8 7 4 1 1 1 1 Amsterdam Sao Paolo Seoul Mumbai Barcelona Sydney Denver Stockholm Amsterdam and São Paulo draw mega-rounds R O U N D S G R E A T E R T H A N $ 1 0 0 M S I N C E 2 0 1 4 D E E P D I V E : U P A N D C O M E R S 41 Spotlight on Stockholm D E E P D I V E : U P A N D C O M E R S Home to Spotify, one of the largest IPOs in 2018, and iZettle, acquired by PayPal for $2B, Stockholm is a high-ranking up and comer. $4B Total raised since 2012 648 Total deals since 2012 34% Increase in first time funding rounds (2016 vs 2017) T O P 5 I N V E S T O R S Current unicorn 42 The Rise of Asia D E E P D I V E The rise of confident tech hubs including those in China and India but also South Korea and Japan are an expression of Asia’s growing influence in the technology sector. 43 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017 First deals to startups growing across region D E E P D I V E : R I S E O F A S I A Company creation in the region is accelerating, shown by first financing trends. Beijing Shanghai Tokyo Seoul C O U N T O F F I R S T - T I M E F U N D I N G R O U N D S T O U N I Q U E C O M P A N I E S 44 Shanghai and Beijing dominate list of big exits D E E P D I V E : R I S E O F A S I A ELE.ME QUDIAN PPDAI GROUP MOBIKE HEADQUARTERS Shanghai Beijing Shanghai Shanghai EXIT TYPE M&A by Alibaba IPO IPO M&A EXIT VALUE $9.5B $7.9B $3.9B $3.7B PREVIOUS INVESTOR(S) Sequoia Capital, Ant Financial, Didi Ant Financial, BlueRun Ventures, Kunlun Worldwide Alibaba Group, Sequoia Capital, Lightspeed China Partners Sequoia Capital, Qualcomm Ventures, Panda Capital CATEGORY Online → Grocery Delivery Online → Lending Online → Lending Mobile → Travel 45 0 2 4 6 8 10 12 2012 2013 2014 2015 2016 2017 2018 Beijing sees the most unicorn births *Births 2012 – June 1, 2018 D E E P D I V E : R I S E O F A S I A Since 2012, Beijing has seen a total of 29 unicorn births, two of which exited. U N I C O R N S B O R N I N H U B S S I N C E 2 0 1 2 Beijing Shanghai New Delhi Seoul Bangalore Tokyo 46 Top tech unicorns within Asian tech hubs Beijing comes in with the most, at 29 total tech unicorns. *Current unicorns as of June 1, 2018 D E E P D I V E : R I S E O F A S I A +26 more companies +2 more companies +8 more companies Pinduoduo 47 Top five most highly valued tech unicorns D E E P D I V E : R I S E O F A S I A DIDI CHUXING XIAOMI CHINA INTERNET PLUS BYTEDANCE dba Toutiao LU.COM HEADQUARTERS Beijing Beijing Beijing Beijing Shanghai VALUATION as of most recent funding date $56B $46B $30B $20B $18.5B YEAR ENTERED 2014 2011 2015 2017 2014 CATEGORY Mobile → Ride Hailing Electronics → Smartphone Online → Ecommerce Mobile → Content Aggregator Online → Lending MOSAIC SCORE 870 890 620 730 730 48 SoftBank’s investments span all of Asia The Japanese telecom giant and tech holding company favors South Korea and China. Data includes all of Softbank’s Affiliates. Funding values since 2012 – June 1, 2018. D E E P D I V E : R I S E O F A S I A +20 more companies +11 more companies +4 more companies +1 more company +11 more companies 49 The Exit Strategy D E E P D I V E 50 “Without big exits, the ecosystem is like a roach motel, money can come in, but it doesn’t get out. And that’s not a good thing for anyone” T H E E X I T S T R A T E G Y — Lou Kerner, Partner at CryptoOracle.io 51 In exits, traditional hubs show their strength T E C H E X I T S ( M & A / I P O ) V A L U E D O V E R $ 1 0 0 M 2 0 1 2 – 2 0 1 8 ( A P R I L 8 , 2 0 1 8 ) D E E P D I V E : E X I T S T R A T E G Y 252 EXITS 61 EXITS 49 EXITS 43 EXITS 34 EXITS 23 EXITS 19 EXITS 19 EXITS 17 EXITS 13 EXITS 52 Exits are for the years 2012 – 2018 (May 20, 2018). Largest tech exits across all hubs D E E P D I V E : E X I T S T R A T E G Y FACEBOOK SPOTIFY JD.COM SNAP HEADQUARTERS San Francisco Stockholm Beijing Venice Beach (LA Metro) EXIT TYPE IPO IPO IPO IPO EXIT VALUE $104B $29.4B $25.7B $24.8B PREVIOUS INVESTOR(S) Horizons Ventures, Microsoft Accel, DST Global, Technology Crossover Ventures Sequoia Capital China, Tencent Holdings Benchmark, KKR, New Enterprise Associates CATEGORY Internet → Social Media Internet → Music Internet → eCommerce Internet → Social Media 53 Tech Hubs That Didn’t Make It This Year L O O K I N G F O R W A R D 54 Metros with high potential for the future L O O K I N G F O R W A R D CITY NOTABLE ACTIVITY Chicago Total of 4 tech unicorns in the region with a 5th born in Q1’18 – Tempus Labs, a biotechnology company. Shenzhen Total of 5 tech unicorns with 15 rounds at $100M+ between 2014 and 2017. Singapore 23% deal growth and 178% funding growth between 2016 and 2017. Two billion-dollar exits in 2016 and 2017. Hangzhou High number of new startups getting funding and home of Alibaba headquarters. Montreal Little tech activity, but home to McGill University (a top tech school) DC 168% increase in deal activity between 2016 and 2017. Home to the Carlyle Group. 55 Methodology I N D E X 56 We used the CB Insights platform to aggregate data around funding and exit events for startups around the world. The 25 top tech hubs were chosen based on a deal share basis of the global total. To diversify our selection geographically, we limited the US hubs to 7. Methodology T E C H D E F I N I T I O N Companies that operate within Internet, Mobile, Software, Computer Hardware, Telecom, Electronics, and Robotics were included in the report. Note that healthcare companies, including those operating within the Medical Device sector, were not included. M E T R O S B R E A K D O W N Metro hubs were chosen on a 30-50 mile radius from city center. Companies were mapped to the respective region based on city/state and city/country matching. Breakdowns of tech hubs into three categories was based on similar deal count to ensure comparison of metros against similar markets. C L A S S I F I C A T I O N O F R O U N D S Equity rounds, first time exits only. Funding includes rounds to companies that are considered to be standalone or not acquired Note: For this report a “startup” is a private tech company. I N D E X 57 The CB Insights platform has the underlying data included in this report W H E R E I S A L L T H I S D A T A F R O M ? CLICK HERE TO SIGN UP FOR FREE 58 cbinsights.com @cbinsights
25 metro areas and who made the cut?
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