Venture capital in the USA

Table of contents:

  1. State of the US startup ecosystem in 2022
  2. Emerging States
  3. Will the unicorn hotspots from 2019-2022 deliver?
  4. Top US cities
  5. Early stage growth US cities
  6. Top US Industries by VC investment
  7. Related Content

State of the US startup ecosystem in 2022

Venture capital in the USA reached $235 billion in 2022, a 35% drop relative to 2021.However, the rate of investment has been fairly consistent over the last ten years when we exclude 2021.

Major metropolitan areas such as the Bay Area, Greater Boston, and New York City continue to make up a large portion of venture capital investment activity, driving more than half of total investment in 2022.

The relative importance of tech hubs outside of the Bay Area has increased as the distribution of unicorn creation moves towards new US cities. While the Bay Area's tech ecosystem still continues to grow, the number of new unicorns created has declined in absolute terms as is visible from the figure below.

Emerging States

The rise of new emerging states in venture capital activity include Wyoming, Vermont, and Michigan to note a few. Activity has mainly been focused on the the North West and scattered parts in the Eastern regions of the US.

 

Will the unicorn hotspots from 2019-2022 deliver?

In the last four years, unicorn hotspots have included states such as Florida, Texas, and New York. Will these states continue this trend in unicorn growth? We will see in the coming decade.

 

Top US Cities

Metro areas throughout the US have doubled at minimum in investment growth over the past 5 years. The top three cities that experienced the most growth over the past year include Jacksonville, Richmond, and Santa Barbara.

A general trend of more recent growth can be seen in a majority of cities over the past two however, this seems to be slowing as only ten US cities experienced an increase in venture capital investment from 2021 to 2022.

Early stage growth US cities

Early stage investment growth can be seen throughout the US with a concentration of cities within the Midwest and East Coast regions seeing the most growth in early stage venture capital investment based on the dollar amount contributed.


The top three cities with the largest percent change over the last 12 months are Milwaukee at 92%, Cleveland at 86%, and Baltimore at 64%. In dollars, Milwaukee saw an increase of $108M in investment, Cleveland saw an increase of $169M in investment, and Baltimore saw an increase of $211M in investment.

Top US Industries by VC investment

The top three US industries for venture capital investment in terms of growth over the 2021-22 period are Cloud Computing, Sports, and Semiconductors.

Compared to the year prior, we can see an overall upward trend in growth for some industries such as Sports and Semiconductors while other industries like Media, Energy, and Event Tech are experiencing a decline.

The industries with the most significant decrease in growth over the last year are Music, Education, Kids, Fashion, Transportation, and Dating. It's also worth noting that some industries such as Sports, Semiconductors, Energy, Legal, and HR Tech have grown significantly over the 2020-22 period.

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