NYC Is Poised to Create the Next Generation of Billion Dollar Tech Companies
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This is a presentation about the state of the tech startup ecosystem in NYC and Venture Capital funding.
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NYC Is Poised to Create the Next Generation of Billion Dollar Tech Companies
- 1. New York Concrete jungle where dreams are made of There's nothin' you can't do Now you're in New York These streets will make you feel brand new Big lights will inspire you David Aronoff, General Partner Flybridge Capital Partners With Great Thanks to InSITE Fellows Patrick Chang, David Lerman, Zak Schwarzman 5 MAR 2014 | PAGE1
- 2. NYC Is the Next Venture Capitol •  •  •  •  •  NYC is on track to create $Billion tech companies Myths and Issues Let the data speak Keys to success rely on city’s secret weapons Conclusions 5 MAR 2014 | PAGE2
- 3. NYC Tech Myths and Issues •  Talent – “We need more people, particularly technical hires” •  Costs – “It’s just too expensive to build startups in NYC” •  Funding – “There are plenty of angel and early stage investors in NYC, but later stage investment funds are hard to find” •  Exits – “New York City is short on massive tech stories” •  Sectors – “AdTech, FinTech, Fashion, Media & nothing else” 5 MAR 2014 | PAGE3
- 4. Poised to Create Massive Successes Success Stories •  Admeld (Acq $400m) •  Buddy Media (Acq $700m) •  Indeed.com (Acq $1b) •  MakerBot (Acq $400m) •  Shutterstock (IPO$2.3b) •  Tumblr (Acq $1.1b) Scaling Startups •  MongoDB •  AppNexus •  OnDeck •  Gilt •  ZocDoc •  Varonis •  Kickstarter •  BetterCloud •  Etsy •  Shapeways •  Outbrain •  tracx •  27 of the BI Digital 100 Vibrant Community •  1.2K+ Tech Startups10 •  375+ Tech Meetups11 12 ²  Total 320K Members 13 ²  NYTM 35K Members •  80+ NY City Govt Programs14 •  45+ Co-Working spaces15 •  60+ Incubators/Accelerators16 World Class Academia •  110 Universities in Region17 18 ²  14 of Top 100 Schools + Students19 ²  500K •  Applied Sciences NYC20 •  Academy for SW Eng /21 Bronx Academy for SW •  CSNYC22 Magnet for Talent Ultimate Access •  262K+ Tech FTEs1 •  #1 City F500 HQs (45)8 2 ²  150K Highly-Skilled •  Traditional: Advertising, 3 ²  26K added since 2007 Fin Services, Fashion, 4 •  #1 Locale Top 5 Undergrad Media, Info Svc, Design •  #1 Women Entrepreneurs5 •  Tech: 8.6K+ Companies9 •  #1 for H1-B Visas 20126 •  Salaries/Rent Lower than SF/SV7 Tech Giants Moving In •  Google: •  Amazon: •  Facebook: •  Yahoo: •  Capacity = 3.2K+ FTEs23 110K Ft2 24 100K Ft2 270K Ft2 4K-6K+ FTEs A Capitol For Capital •  Largest City Econ $583B25 •  #2/#3 in VC Funding26 •  $13.6B Raised Since 200627 •  #1 in VC $ invest growth28 5 MAR 2014 | PAGE4
- 5. Startup Lifecycle 9.5 years29 Initial Investment Follow On Investment & M&A IPO Dead Pool 5 MAR 2014 | PAGE5
- 6. Funding On Track # per Round Category Looking at VC financings over the past decade, by round and dollars, this generation of tech startups began in late 2005, early 2006. SOURCE: Thomson Reuters, CrunchBase30 5 MAR 2014 | PAGE6
- 7. Funding On Track $ per Round Category Looking at VC financings over the past decade, by round and dollars, this SOURCE: Thomson Reuters31 generation of tech startups began in late 2005, early 2006. SOURCE: Thomson Reuters, CrunchBase31 5 MAR 2014 | PAGE7
- 8. Funding On Track Investment Size Looking at VC financings over the past decade, by round and dollars, this SOURCE: Thomson Reuters31 generation of tech startups began in late 2005, early 2006. SOURCE: Thomson Reuters, CrunchBase32 5 MAR 2014 | PAGE8
- 9. Startup Growth Outpaces Competitors Total Number of VC Investments 2012 Boston Seattle Silicon Valley 408 112 Philadelphia 71 1159 Chicago 379 117 NYC DC Metro 335 LA/San Diego 105 87 Austin SOURCE: The Atlantic, Martin Prosperity Institute33 5 MAR 2014 | PAGE9
- 10. Great Exits / Massive Winners on Track Financings $13.6B+ Raised Since 2006 34 IPO SOURCE: Thomson Reuters 5 MAR 2014 | PAGE10
- 11. Great Exits / Massive Winners on Track Scaling Startups Dozens of Startups Surging Towards IPO IPO SOURCE: Thomson Reuters 5 MAR 2014 | PAGE11
- 12. Great Exits / Massive Winners on Track M&A 554 Transactions Since 2006 IPO 35 SOURCE: Thomson Reuters 5 MAR 2014 | PAGE12
- 13. Great Exits / Massive Winners on Track IPO IPOs 2013: 7 Completed, 1 Filed 36 SOURCE: Thomson Reuters 5 MAR 2014 | PAGE13
- 14. Much More than New Media AdTech eCommerce Fashion FinTech Analytics EdTech Hardware 2.0 Video/Photo Health/Fitness Enterprise 2.0 5 MAR 2014 | PAGE14
- 15. The NYC X Factor •  NYC always welcomes newcomers – tech no different –  350+ tech meetups with more than 320K+ members –  NYTM is the pinnacle, with more than 35K members •  Easy to see that community is core to NYC’s success •  But is there a way to analyze impact more quantitatively? 5 MAR 2014 | PAGE15
- 16. •  Endeavor is a global not-for-profit that catalyzes countries’ economic growth through high-impact entrepreneurship •  To support their mission, Endeavor’s research group has mapped the startup genome around the globe, asking founders of tech startups key questions, including: –  –  –  –  –  Who INSPIRED you to become an entrepreneur? Where were you EMPLOYED before becoming an entrepreneur? Who INVESTED in your company? Who MENTORED you as you built your company? Have you FOUNDED any additional companies? •  They capture the results in diagrams that depict the DNA of communities and its multiplier effect. 5 MAR 2014 | PAGE16
- 17. The Multiplier Effect 5 MAR 2014 | PAGE17
- 18. The Multiplier Effect •  Data gathering is expected to be complete by January •  So far 700+ companies connect to one another and preliminary data is challenging conventional wisdom within sector… SOURCE: Endeavor Global 5 MAR 2014 | PAGE18
- 19. Core Questions •  DoubleClick employees founded more than 20 companies in NYC tech, and account for more than 30 CEOs in the city •  From which universities do NYC Tech founders graduate? •  What is the longest chain of connections in NYC Tech? It’s 8 companies long in Buenos Aires. •  How many entrepreneurs have the most inspirational community members inspired? •  Which are the most influential companies/organizations? •  How many “generations” until the tech ecosystem is largely self-sustaining in terms of human resources? SOURCE: Endeavor Global 5 MAR 2014 | PAGE19
- 20. Conclusions •  The NYC Tech community has catapulted to a leading entrepreneurial center in only 7 years •  Massive M&A exits, established leaders across multiple sectors, combined with strong growing IPO pipeline position NYC well •  No dispute that NYC has arrived if in 24-36 months: –  Talent: Multiplier effect continues to grow exponentially –  Funding: Remains consistently #2 or #3 for venture capital in US –  Exits: Cohort on runway yields 2-3 multi $B public companies 5 MAR 2014 | PAGE20
- 21. Footnotes / Links 1 Building a Digital City: The Growth and Impact of New York City’s Tech/Information Center, p. 2 20 Partnership for New York City, NYC Jobs Blueprint, p. 25 2 Partnership for NYC 21 Academy for Software Engineering Bronx Academy for Software Engineering 3 Building a Digital City: The Growth and Impact of New York City’s Tech/Information Center, p. 2 22 The Computer Science Education Foundation of New York City 4 LinkedIn Research 23 WNYC 5 Startup Ecosytem Report Part 1, p. 35 24 NYC Real Estate Broker's estimates Partnership for New York City, NYC Jobs Blueprint, p. 13 6 H1 Base 25 7 Angel List Research 26 NYC TechCity, p. 8 8 Fortune 27 NY VC Almanac, p. 7 9 NYEDC, p 4 Economic Research and Analysis, Tech Trends August 2013 28 The Atlantic / Martin Prosperity Institute 10 NYC TechCity, p. 1 29 SEC Filing Analysis Meetup.com Research 30 Thomson Reuters Analysis – See slide 19 Meetup.com Research 31 Thomson Reuters Analysis – See slide 19 NY Tech Meetup Research 32 Thomson Reuters Analysis – See slide 20 Promoting Entrepreneurship in NYC, NYEDC p2 33 The Atlantic / Martin Prosperity Institute Updated with 2012 Data from ??? Mark Birch Research 34 NY VC Almanac, p. 7 <Thomson Analysis> - Add rationale Yahoo Finance: Shutterstock, Tremor Video; SEC Filing: Varonis 11 12 13 14 15 16 Mark Birch Research 35 17 AON / Partnership for New York, p. 11 36 18 US News & World Report 19 AON / Partnership for New York, p. 11 5 MAR 2014 | PAGE21
- 22. Industry Taxonomy : Financings •  The following taxonomy was used for industry data filtering for financing activity 2006 – present, slide 6 & 7 •  Additionally, a 40 mile radius around NYC was used for inclusion of company data 5 MAR 2014 | PAGE22
- 23. Industry Taxonomy : M&A •  The following taxonomy was used for industry data filtering for M&A activity 2006 – present, on slide 8 •  Additionally, a 40 mile radius around NYC was used for inclusion of company data 5 MAR 2014 | PAGE23