Startups based in New York City raised $55 billion from private-market investors last year, more than tripling the funding total from 2020, according to a new report from research firm CB Insights.
The investment total underlines how the city’s startup scene has been super-charged by a combination of a strong venture capital investment market, a maturing local entrepreneurial scene and a push toward online solutions brought by the Covid-19 crisis that boosted demand for the offerings of many tech companies.
Some investors have expressed fear the market is overheated, but the numbers have yet to show any slowing down. City startups closed out the year by raising $18 billion from October through December, according to the report, the highest for any quarter on record.
The funding came across 471 deals, compared with 516 separate deals in the third quarter. The lower deal count, paired with the record investment total, shows how megadeals of more than $100 million are becoming more common for local tech firms
There were 150 such deals in 2021, according to a list kept by industry group Tech:NYC, compared with 21 in 2019.The overall U.S. venture investment market doubled in 2021, according to CB Insights, to reach $311 billion.
The largest local deal tracked by the firm last quarter was a $3.2 billion private-equity investment for Authentic Brands Group, owner of brands such as Brooks Brothers, Sports Illustrated and Forever 21. On the more techie side of things, the second-largest deal was a $1 billion investment into NYDIG, a Bitcoin-focused brokerage and asset-management business in Midtown, serving institutional investors.
New York City is the second-largest market for technology investment but still well behind California’s Silicon Valley region, which includes the cities of San Jose, Oakland and San Francisco. Startups based there raised $105 billion for the year.
The report indicated that tech hubs are emerging beyond New York and California, with growing early-stage startup funding in Miami and Philadelphia. Boston is the third-largest market for technology investment, driven by the city’s strength in biotechnology.