Comptroller Stringer Report Shows New York City is a Magnet for Venture Capital Investment

(New York, NY) – New York City’s economy continues to benefit from the global boom in venture capital investment, according to a report released today by Comptroller Stringer. The Comptroller’s report uses data from Crunchbase – a private company that tracks venture capital worldwide – to measure New York City’s standing among the world’s twenty largest global venture capital markets from 2008 to 2017. The analysis demonstrates New York City’s continuing ability to attract venture capital investment as well as the breadth and diversity of businesses that attract venture capital – including many well-established sectors.

The analysis shows New York was one of the top five global destinations for venture capital dollars in 2017. The number of venture capital deals in the city grew by 256 percent, and the amounts invested by 439 percent, since 2008. The analysis also detailed venture capital’s impact on the New York City economy, as venture capital flows to a wide range of businesses in and outside of the city’s legacy industries of finance, advertising, media, and culture that support roughly 355,000 jobs – building on the city’s existing economic foundations to modernize and reshape the way those industries will do business in the 21^st century.

“New York City is the home of innovation and it’s only right that people look to us when they want to invest in technology and business. Our economy works best when people with big ideas can get the financial support and expertise that they need to grow – and that’s what our report shows,” said Comptroller Stringer. “We have to make sure that all New Yorkers with the idea, talent, and drive have access to new capital and networks, because venture capital doesn’t just go to internet start-ups. To keep building a true five-borough economy for the 21^st Century, we need to make sure that New York provides the opportunity and space to grow for everyone, and keep investing in diverse, local talent.”

Venture capital is a type of investment often sought by start-up companies with high growth potential but limited prospects of obtaining traditional bank loans or other types of financing. In exchange for funds, companies provide an ownership stake to investors, who also may take on a management role, with a goal of helping the company expand and succeed, ensuring the investor can profit when they exit the agreement.

Comptroller Stringer’s report shows:

Venture Capital Growing in NYC

• As venture capital investments have exploded globally, New York City has held its own. Companies headquartered in the City raised the fifth largest sum of venture capital dollars in 2017 compared to global cities. Only companies headquartered in Beijing, San Francisco, Silicon Valley and Shanghai raised more.
• Companies headquartered in New York City outraised those in most other global cities in 2017, including: London, Boston, Singapore, Hong Kong, Shenzhen, Los Angeles, Chicago, Paris, Berlin, Bangalore, Jakarta, Seattle, San Diego, Hangzhou and Washington D.C.
• Between 2008 and 2017, the number of venture capital deals in the city grew by 256 percent and the amounts invested rose by 439 percent – increasing New York City’s share of the global venture capital market from 4.58 percent in 2008 to over 6 percent in 2017.

Diversity of Venture Capital in NYC

• More than 4,400 companies headquartered in New York City obtained venture capital backing from 2008 through 2017, a total that trailed only San Francisco and Silicon Valley in the U.S. – a strong indication of New York City’s strength as an entrepreneurial and start-up destination.
• At the same time, the number of companies, and the range of industries they represent, continues to show a diversity of sectors that attract venture capital in New York City – a sign of strength for the local economy. Venture capital has also played a significant role in job creation, providing backing to New York City-based firms that employ some 355,000 workers.
• 79 industry clusters in New York City obtained above average shares of venture capital activity in recent years. Only San Francisco, London, Silicon Valley and Boston outperformed New York on this measure.
• Unlike venture capital in Silicon Valley, in New York, firms that attract venture capital are those focused on applying new technology to the transformation of existing sectors for the knowledge age.
• Many of the sectors that have drawn venture capital in recent years are well-established City industries – from advertising and publishing, to financial services and real estate – but many new and niche businesses are also using venture capital to gain a foothold in the city’s diverse economy.

To read Comptroller Stringer’s full report on venture capital in New York City, click here.

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