Thanks to the 21st Century Cures Act, which added specific requirements for data sharing and costly penalties for non-compliance and data blocking, these healthcare data silos are finally collapsing. 

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The post Where Sequoia Capital is investing in blockchain and crypto appeared first on CB Insights Research.

Funding to Miami-based startups soared in 2021, with Q4’21 alone seeing a record $2.2B. While this total fell by 50% in Q1’22, deals ticked up to a new high of 81 from a record 149 disclosed investors, signaling broad and growing interest in startups in the metro area — although it remains to be seen how Miami fares in the current market downturn.

As the city’s tech ecosystem grows, and hundreds of new vendors enter the market, enterprises and investors face the challenge of cutting through the noise to identify the most promising startups.

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The region had a mammoth funding year in 2021, doubling year-over-year to top $106B. And in Q1’22, despite a funding decline of 2% quarter-over-quarter (QoQ), the region’s share of total US funding grew 9 percentage points to 41%.

However, Silicon Valley has a sky-high cost of living and an ultra-competitive environment among startups vying for VCs’ attention. Buoyed by the rise of remote work, many in tech are leaving in favor of cheaper, less competitive cities. 

In particular, Sun Belt cities have beckoned a wide range of tech workers, founders, and investors. For instance, compared to California, Florida and Texas have no income tax — a boon for workers — and a cheaper cost of living. The pandemic also drove many residents out of densely populated urban centers toward smaller, midsize ones.

Below, we explore investment trends in 3 up-and-coming tech hubs — Austin, Miami, and Dallas — that have seen some of the strongest levels of funding and population growth in recent years.

Austin, TX

Austin is on a roll. 

In Q1’22, the city had its second-best quarter ever for funding ($1.8B) and saw a record 105 deals. Early-stage deal share sunk to 50% — a 5-year low if the trend holds through 2022 — as startups in the city mature into later stages.

Austin is now the fastest-growing major metro area in the US, with an estimated 184 new residents each day. Austin’s tech scene is also growing at a rapid clip: From May 2020 to April 2021, Austin gained tech workers at a higher rate than any other US metro by far, according to LinkedIn data.

Many of these workers are coming straight from Silicon Valley, discouraged by the area’s high taxes and cost of living. According to a Bloomberg analysis of USPS data, during the pandemic, more of Austin’s new residents moved from San Francisco than from anywhere else outside of Texas. 

Top tech companies are also moving: Tesla and Oracle both relocated their headquarters from Silicon Valley to Austin during the pandemic.

As Austin’s tech scene has developed, the city has seen significant funding growth. Funding more than tripled QoQ in Q2’21, and has since held at $1B+ levels every quarter — it even grew in Q1’22 despite the venture market’s downturn.

Austin’s tech scene represents a range of sectors. For instance, while some of the largest rounds in Q1’22 went to smart city and infrastructure startups — including parking software firm FLASH and 3D-printed building developer ICON 3D — the city is also home to digital health unicorns such as Wheel, Everly Health, and Iodine Software.

Funding and investor highlights in Austin:

• Unicorns: The Austin metro area has 11 unicorns to its name, including 3 born in 2022: FLASH, Wheel, and enterprise AI company SparkCognition. Austin’s most valuable private company is The Boring Company, a $5.7B tunneling startup founded by Elon Musk.
• Top deal: The biggest round in Q1’22 went to FLASH, which raised a $250M private equity round. This was one of 6 mega-rounds (deals worth $100M+) in the quarter.
• Top investor: Austin’s own Silverton Capital was the most active investor in Austin-based companies in 2021, with 14 deals, as well as in Q1’22 (5 deals).

Miami, FL

Investors are also looking to Miami as the next big US tech hub. These include Founders Fund general partner Keith Rabois, as well as Blumberg Capital’s David Blumberg, whose reasons for moving include the ease of being “on the phone to Israel and New York without any time zone-related problems” and the city’s proximity to Latin America for deal-making.

Meanwhile, in January 2021, Japan’s SoftBank Group pledged to invest $100M in tech startups in the region — only to blow past this goal, investing over $250M within 9 months of the announcement.

After a bonkers Q4’21, funding to Miami-based startups fell 50% in Q1’22 to $1.1B. However, deals ticked up to a new high of 81 from a record 149 disclosed investors, signaling broad and growing interest in startups in the region.

Blockchain tech has become an increasing focus in Miami, which has hosted the international Bitcoin Conference for 2 years running. Blockchain.com recently moved its US headquarters to the city, while eToro opened a US hub there. Mayor Francis Suarez has vocally supported the influx of crypto business.

In Q1’22, Miami took the #4 spot — after New York, Silicon Valley, and LA — for blockchain & crypto funding, with over $500M. Despite representing just 1.5% of all US venture funding in the quarter, the city accounted for nearly 9% of all US blockchain funding.

Funding and investor highlights in Miami:

• Unicorns: The Miami metro area is home to 10 unicorns, including 2 additions in 2022 so far: design materials marketplace Material Bank and Yuga Labs, which owns the Bored Ape Yacht Club and CryptoPunks NFT collections. Yuga Labs is also the city’s most valuable unicorn at a $4B valuation.
• Top deal: Miami’s largest deal in Q1’22 was Yuga Labs’ $450M seed round, led by Andreessen Horowitz. This was also the quarter’s largest seed round across all global regions.
• Top investor: SoftBank was the top investor in 2021 with 7 deals, while Florida Funders, a VC fund and angel network based in Tampa, took the top spot in Q1’22 with 3 deals.

Dallas, TX

Dallas’ tech scene has been quietly — but rapidly — growing. Investors, founders, and big tech companies have not been as vocal about the city as Austin or Miami, but the numbers speak for themselves.

Like Austin, Dallas was one of just 4 US metros to see funding grow QoQ in Q1’22, amid a pullback across venture as a whole.

Moreover, year-over-year, Dallas saw tremendous growth — far more than any other US city. Funding soared 462%, from $403M to $2.3B, boosted by a $1B late-stage round. Deals also surged to a new high of 54. This included 6 $100M+ mega-rounds.

Dallas’ tech workforce is also growing: It’s now the #3 metro area in the country, after NYC and LA, for number of tech job openings.

Funding and investor highlights in Dallas:

• Unicorns: The Dallas metro area counts 6 unicorns, including 1 addition in Q1’22: Island, which develops an adjustable web browser for enterprises. Dallas’ most valuable private company is precision oncology startup Caris Life Sciences, worth $7.8B.
• Top deal: The biggest round in Q1’22 went to cybersecurity firm Securonix, which raised a $1B Series D. This was one of 6 mega-rounds (deals worth $100M+) in the quarter — after just 4 mega-rounds in all of 2021.
• Top investor: Since 2017, the most active investor in Dallas companies has been Revolution’s Rise Of The Rest Seed Fund, which backs startups based outside of Silicon Valley, New York, and Boston — the traditional US tech hubs. The fund has participated in 11 deals in Dallas since 2017. In Q1’22, Sequoia Capital, Stripes Group, Insight Partners, and Rally Ventures tied for the top investor spot with 2 deals apiece.

For more insights on the top regions, startups, and investors in VC, download the full State of Venture Q1’22 Report.

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Amid the massive migration out of major cities, fueled by record-low interest rates, mortgage and refinance applications have jumped. This, in combination with this year’s economic recovery, has caused investors to turn to and place their bets on tech companies focused on digitizing all aspects of the industry.

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Although startups based in California, New York, and Massachusetts have traditionally accounted for the majority of VC tech investment in the US, VCs are spurring other hotbeds of innovation across the country.

Using CB Insights data, we analyzed the most active venture capital firms investing in tech startups in every US state.

See the full list of VCs at the end of this post.

Our analysis looks at the most active VC in each US state plus Washington DC, based on unique equity investments to tech startups located in that state. In cases of a tie, we used recency of deals, overall deal activity, and investor quality to select the most active tech startup investor for that state. 

Please click to enlarge.

Three of our Smart Money VCs — top VCs according to portfolio valuations and investment outcomes — made their marks on the map: Andreessen Horowitz (California), Lightspeed Venture Partners (Nevada), and New Enterprise Associates (DC).

Two investors appear multiple times on our map. In the Midwest, M25 leads in Illinois and Nebraska. And in the Mountain West, Next Frontier Capital is the top VC investor in Idaho and Montana.

There have been a number of shake-ups since we last conducted this analysis in April 2021, with 14 changes in top investors. Meanwhile, Andreessen Horowitz (California), Lerer Hippeau (New York), Accomplice (Massachusetts), and New Enterprise Associates (DC) held their ground in these VC hotspots.

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In our latest map of the most well-funded tech startup in each state, some companies with the deepest pockets were found in North Carolina (Epic Games, $4.4B), Florida (Magic Leap, $3B), and Georgia (OneTrust, $930M). All together, the companies on this map have raised more than $40B.

Using CB Insights data, we identified the most well-funded technology startups by state based on total disclosed equity funding. The full list of startups is included below the map.

Our analysis ranks private tech companies based on total disclosed equity funding. Companies included have raised at least $1M in equity funding since January 2016. All companies on our map are VC-backed, with the exception of West Virginia.

Please click to enlarge.

Key takeaways from the top tech startups in the US

• • The most well-funded US tech startup is California-based e-cigarette company JUUL Labs, with a whopping $15B in disclosed equity funding. Most recently, the company raised a $700M mega-round in February 2020, earning it a $12B valuation. 
  • After JUUL, the most well-funded startups on our map are North Carolina-based video game developer Epic Games ($4.4B in equity funding) and Pennsylvania-based delivery service goPuff ($3.4B).
  • Our map features 19 unicorn companies valued at $1B+, including cybersecurity company Tanium (WA, $9B valuation), healthcare-focused RPA company Olive (OH, $4B valuation), and corporate training platform Articulate (NY, $3.8B valuation).
  • New York-based Articulate is the most recently minted unicorn on our map: the online training platform hit a $3.8B valuation following its $1.5B Series A round in July 2021.
  • 7 companies on the map have raised over $1B in total disclosed equity financing: JUUL Labs, Epic Games, GoPuff, Magic Leap, Articulate, Tanium, and DataRobot. All of these companies are valued at over $1B.
  • Including the 7 startups mentioned above, 35 companies on the map have raised $100M or more in equity funding.
  • 11 of the startups on our map have raised $50M or less in equity funding. The venture capital-backed startup with the least funding on the map is Alaska’s 60Hertz Energy, which develops energy asset maintenance software.
  • The bulk of these companies (31) have raised funding in 2021; just 8 last raised prior to 2020.

Since our last update of the map in February 2021, there have been 4 exits: Maryland’s Xometry, New York’s UiPath, and Virginia’s Privia Health each made their IPO, while Oregon’s Vacasa is going public via a SPAC.

List of top-funded tech startups in the US

*Company is not VC-backed 

To learn about the top tech startups outside of the US, check out our articles below:

The Most Well-Funded Tech Startups in Asia and the Pacific

The Most Well-Funded Tech Startups in the UAE

The Most Well-Funded Tech Startups in Latin America and the Caribbean

The Most Well-Funded Tech Startups in Europe

The post The United States Of Startups: The Most Well-Funded Tech Startup In Every US State appeared first on CB Insights Research.

The industry is maturing at a blistering pace. A number of new records were achieved in Q2’21, including 50 mega-rounds, 24 new AI unicorns, and 119 exits. Notable events include Waymo’s $2.5B funding round, UiPath’s $29B IPO, and Microsoft’s $19.7B acquisition of Nuance.

Investors are betting on AI tech across the country. Using CB Insights data, we mapped out the top-funded AI startup in every US state.

Collectively, these startups have raised more than $10.3B in disclosed equity funding, with leading companies including Databricks ($1.9B in disclosed equity funding), Tanium ($1.17B), and Indigo Ag ($1.15B).

See the full map below.

Our analysis ranks companies based on total disclosed equity funding and only considers AI companies that have raised an equity round since 2016. 

Please click to enlarge. 

KEY TAKEAWAYS

• The most well-funded AI startup on our map is California’s Databricks, with almost $1.9B in total disclosed equity funding. It supplanted driverless delivery company Nuro. Following its $1B Series G in February, the data analytics company reached a $28B valuation.
• Rounding out the top 3 highest-funded startups on our map are Washington-based Tanium ($1.17B) and Massachusetts-based Indigo Ag ($1.15B).
• There are 9 unicorns on our map: Databricks ($28B valuation), Tanium ($9B), Indigo Ag ($3.5B), Tempus ($8.1B), Dataminr ($4.1B), Olive ($4B), Argo AI ($7.3B), HighRadius ($3.1B), and XANT ($1.7B).
• 14 startups on the map have raised over $100M in disclosed equity funding, including self-driving tech developer HighRadius ($475M) and IT operations platform ScienceLogic ($189M).
• 31 startups on this list have raised at least $10M in equity funding. The startup with the least funding on the list is Rhode Island’s startup discovery platform The Innovation Scout, which has raised $50K to date.
• 17 of these companies have already raised new funding in 2021, while 15 last raised funds in 2020.
• Since our last update in March, 4 companies have exited: New York’s UiPath, Utah’s Recursion Pharmaceuticals, Maryland’s Xometry, and Missouri’s Benson Hill (which went public via a SPAC).

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These banks provide an alternative to traditional one-size-fits-all banking approaches by targeting groups based on demographic factors like age, gender, ethnicity, occupation, and socioeconomic status. For example, companies building financial products for kids might offer debit cards with extensive parental controls while banks catering to immigrants may have perks like no-fee international money transfers.

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The news comes after Apple beat expectations with its 5G-enabled iPhone 12. It also comes on the heels of a steady increases in total funding to 5G companies since 2016, which hit all-time highs in 2020.

With studies suggesting a majority of companies plan to adopt 5G within the next 3 years, the technology is increasingly relevant to company plans across industries, and earnings calls mentions of the tech are ticking up. 

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Armed with newly fortified balance sheets and riding a wave of digital-first momentum kicked off by the pandemic, many leading challenger banks are expanding their product suites to more closely mirror traditional banks.

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Equity funding to the space came in at $8B, a 10% decline year-over-year (YoY), while deals fell 17% to 446. Real estate tech companies raised $2.8B in Q1’21, marking a 27% drop YoY. 

Despite dampened funding, 2021 has already seen several high-profile SPAC and IPO announcements, including Hippo Insurance’s $5B SPAC merger, Compass’ $10B IPO, States Title (now Doma)’s $3B SPAC merger, Offerpad’s $3B SPAC merger, and Matterport’s $2.3B SPAC merger. 

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Over the last several years, US banks have backed an increasing number of deals to fintech startups, seeking high returns and strategic partnerships. Since 2018, the capital markets category — which includes companies that are augmenting or replacing securities issuance, trading, clearance, and operations — has held strong as the top fintech category for banks’ investments.

Other categories — like blockchain, which reached a fever pitch in 2015 — have cooled off in recent years. Below, our heatmap displays where the top US banks have concentrated their bets in fintech over the past decade.

We define US banks as regulated banks with headquarters in the United States. Our analysis only includes equity investments made to private fintech companies since 2010. Categories are not mutually exclusive, and companies are categorized according to their primary focus.

Please click to enlarge. 

Key takeaways

• US banks have made 90+ individual investments to capital markets companies since 2010, making it far and away the hottest fintech category for investment. The largest round in this group was equity management firm Carta’s $300M Series E round in May 2019, which included Goldman Sachs, among other investors.
• Following capital markets, the wealth & asset management category has received the next highest number of investments from US banks. This category comprises tools and platforms for personal financial management, digital advice, wealth management, and analytics. It has gained notable momentum since 2018.
• The SMB category, which consists of startups focused on providing financial solutions to small- and medium-sized businesses, has also gained traction in recent years. Deals in 2020 included mega-rounds like HighRadius‘ $125M Series B, backed by Citi Ventures, and Jushuitan‘s $100M Series C, backed by Goldman Sachs and others.
• In 2015, US banks paid substantial attention to the blockchain & crypto category, making 13 investments to the category that year alone. However, the category’s momentum has since slowed among banks, drawing only 1 deal in 2020.

For more insights, see our full report on Where Top US Banks Are Betting On Fintech here.

The post Heatmap: Where US Banks Have Concentrated Their Bets In Fintech appeared first on CB Insights Research.

Since 2014, the wealth management space has seen a steady increase in M&A activity, with deals peaking at 396 in 2019. Though 2020 saw a slight dip, M&A efforts of some of the largest wealth and asset managers in the US signal that consolidation will continue to shape the future of the industry.

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Investors are backing huge deals, with Q1’21 already setting the record for total mega-rounds in a quarter. It has also seen the highest funding total for a quarter since Q2’18, which included Ant Financial’s massive $14B raise.

The surge in e-commerce is likely to continue offering tailwinds to the space, as late-stage fintechs become ripe for exits. Already, there has been a host of exit activity from mature fintech startups of late, with multiple fintech companies filing for IPOs, going public, or getting acquired, including:

• Affirm, which made its public market debut in January
• SoFi, which exited via an $8.7B SPAC in January
• Sweden-based Klarna, which filed its prospectus late last year (and which we highlighted in our Fintech 250 list)
• Robinhood, also a Fintech 250 company, helped drive record-high fintech funding in 2021 and is another IPO hopeful

Using CB Insights data, we mapped out the top-funded fintech startup in every US state.

Collectively, these 44 startups have raised nearly $14.3B in equity funding, with leading companies including accounts payable automation startup AvidXchange (North Carolina, $1.2B raised), restaurant finances management system Toast (Massachusetts, $903M), and data analytics company Dataminr (New York, $569M).

See the full map below.

We define fintech broadly to include technology companies that provide services to the financial services industry as well as technology companies that create, distribute, and administer financial products themselves. Our analysis ranks private, VC-backed fintech companies based on total disclosed equity funding. Companies included have raised at least $1M in equity funding and have had an equity deal since 2015.

Please click to enlarge. 

KEY TAKEAWAYS

• The most well-funded US fintech startup is Robinhood, with $5.6B in total disclosed equity funding. The San Francisco-based stock trading app saw a boom in retail investors amid the pandemic, fueled by pandemic-induced investor boredom as well as the recent GameStop short squeeze.
• Robinhood is followed by Minnesota-based Bright Health ($1.6B in disclosed equity funding), which provides a platform for healthcare plans, including Medicare Advantage plans, and North Carolina-based AvidXchange ($1.2B).
• There are 8 unicorn startups on our map: Robinhood (CA, $11.7B valuation), Toast (MA, $4.9B), AvidXchange (NC, $2.4B), MX Technologies (UT, $1.9B), Dataminr (NY, $1.6B), Remitly (WA, $1.5B), Bright Health (MN, $1B), and C2FO (KS, $1B).
• Three companies have garnered more than $1B in funding: Robinhood, Bright Health, and AvidXchange.
• Including the above, 19 startups on the map have raised over $100M in disclosed equity funding, including Georgia-based health claims management company Navicure and Illinois-based SaaS investment management company Enfusion.
• Six startups on this list have raised less than $10M in disclosed equity funding. The startup with the least funding on this list is Nebraska-based Financial Transmission Network, with $1.5M in equity funding.
• Since our last update in November 2020, there have been a number of shakeups. Several of these were due to exits, including the two top-funded companies of our previous graphic, SoFi and Oscar Health, which both went public. Intercontinental Exchange-backed crypto platform Bakkt said in January it will go public via a SPAC merger. Credit data company Cortera, based in Florida, was acquired by Moody’s in February, while restaurant software company Upserve was acquired by Lightspeed in December.

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Startups in the space aim to help individuals manage their finances and often offer lower-income investors access to historically unavailable asset classes like corporate bonds and real estate. Others develop platforms and tools that help wealth management professionals amp up their services through more effective portfolio management, investment tracking, advising, and more. 

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However, despite the progress it has made, Root’s insurance book is currently dwarfed by those of leading auto insurance carriers. As of 2019, Root had captured only about 0.2% of the US auto insurance market, according to NAIC. This market share gap points to some of the challenges facing the company as it goes public.

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For consumers specifically, understanding, identifying, and choosing appropriate health insurance plans and benefits has been an increasingly complex process.

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The post Private Health Plans And Benefits Management Companies See A Boost In Funding appeared first on CB Insights Research.

Recent economic uncertainty has impacted the CVC outlook, and some corporates may be holding back on investment until a return to normalcy. However, some firms are charging ahead.

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Though funding took a hit in Q2’20 both globally and in the US, deal activity recovered compared to Q1’20. However, the extent of Covid-19’s impact remained visible when compared to 2019 levels. 

We take a look at how the coronavirus pandemic has shaped venture capital financings in Q2’20.

1. VC deals to US-based startups in Q2’20 saw a quarterly increase but were down compared to last year

In the US, deal activity reversed a 3-quarter decline.

VCs cut 1,374 deals to US-based startups in Q2’20, up from 1,336 in Q1’20. However, despite the quarterly increase, Q2’20 deals were down 18% year-over-year (YoY). 

In terms of funding, US-based startups garnered a collective $26.9B in Q2’20, down less than 1% from the prior quarter. 

2. The number of quarterly mega-rounds ($100M+) in the US hit a new record in Q2’20

US-based companies raised a record 69 mega-rounds totaling $12.1B in Q2’20. Mega-rounds comprised 45% of the quarter’s funding, relatively flat from Q1’20.

Year-to-date, US-based mega-round investments garnered $24.4B, pacing below 2019 levels.

However, there were a number of significant rounds in Q2’20, with Stripe leading the pack with its $600M Series E+ in April. Palantir and Sana Biotechnology followed, raising $500M and $481M respectively.

Rounding out the top 5 were DoorDash with its $400M financing, and Magic Leap, which picked up $350M. 

3. Unicorn births declined for the fourth consecutive quarter

The number of new unicorns in the US steadily declined over the past year.

In Q2’20, just 11 new unicorns joined the herd to bring the total US total to 209 — 44% of the global unicorn count. The US aggregate unicorn valuation amounted to $630B, a slight upward tick after 2 quarters of decline. 

Among the highest-valued unicorns in the US were payments processor Stripe ($36B valuation) and space tech company SpaceX ($36B). Following behind were Palantir ($20B), Airbnb ($18B), and DoorDash ($16B). 

The top-funded companies in the US as of Q2’20 have raised over $2B each. JUUL Labs has remained the most well-funded company, with more than $15B in total disclosed funding. Runner-up Airbnb has garnered $3.6B.

4. In the US, IPO exits jumped while M&A activity fell amid the pandemic

After 3 quarters of declines, IPO activity rebounded, with 24 US-based, VC-backed companies going public in Q2’20, up from 15 in Q1’20. The majority (17) of these IPOs were healthcare companies, but just 2 made the top 5 in terms of valuation: Irvine-based Inari Medical and Cambridge-based Generation Bio.

Meanwhile, M&A activity plunged to an 8-quarter low, with 120 exits in Q2’20 vs. 155 in Q1’20. Three of the top M&A exits in the US were fintech startups, including Galileo Financial Technologies, Personal Capital, and Finicity. 

5. Globally, deals recovered compared to Q1’20 while funding dropped 

Globally, deal activity rebounded in Q2’20 to 3,812 deals, while funding decreased to $50.2B.

Both deals and dollars were down on a YoY basis, with funding down 13% and deals 9%. Asia accounted for the biggest rebound, with quarterly deals rising 20% in Q2’20 as it began to recover from the Covid-19 pandemic. 

6. Digital health dominated deal activity in the US 

Digital health and medical devices saw an increase in deals in Q2’20, as companies scrambled to develop solutions for the pandemic. 

Digital health startups raised $3.1B across 173 deals in Q2’20, the highest number of deals since Q2’19. Expansion-stage (Series B & C) digital health companies picked up a chunk of the financings in Q2’20, raising $613M. 

Take a look at all the underlying data and insights in our PwC and CB Insights’ Q2 2020 MoneyTree report. 

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