Venture capital funding to Seattle-area startups reached a record-high $3.59 billion in 2019, according to the latest PitchBook-NVCA Venture Monitor data released Tuesday.
The massive cash influx — up 20 percent from 2018 — was driven by mega-deals for billion-dollar startups such as Convoy, Outreach, Auth0, Icertis, and others, as well as a flurry of other deals (385 in total, up from 348 in 2018). There were seven deals in excess of $100 million, compared to four last year.
Despite the record, VC activity in the Seattle region still pales in comparison to Silicon Valley ($50.6 billion raised in 2019); New York ($27.5 billion); Boston ($10.7 billion); and Los Angeles ($8.2 billion). Seattle ranked ahead of metros including San Diego, Miami, Chicago, and Austin.
But the increased funding reflects the continued growth of Seattle’s robust tech ecosystem and interest in the region from investors across the globe.
And there should be more on the way.
Several startups across industries such as life sciences, real estate, biotech, retail, logistics, and more are waiting in the unicorn wings, including several on the GeekWire 200, our ranking of the Pacific Northwest’s privately held tech startups. Many are led by veterans of hometown tech giants Microsoft and Amazon, in addition to former employees of companies such as Facebook, Dropbox, Apple, and others that have large engineering centers in the Seattle area.
Local investors also plan to invest in more companies this year, and interest from out-of-town firms continues.
A combination of a critical mass of tech talent, local STEM programs, new early stage venture funds, angel investors with more cash, and maturing company-building support lead some to believe that Seattle’s startup scene is poised for unprecedented growth.
“There are numerous leading indicators that paint a picture of extraordinary acceleration of startup creation over the next few years.” wrote Jacob Colker and Oren Etzioni of the Allen Institute of Artificial Intelligence.
Nearly $4 billion went to startups based across the Pacific Northwest, including Portland and Vancouver B.C. companies, according to GeekWire’s funding deal tracker.
Here are some other takeaways from the PitchBook-NVCA report:
- VC funding to startups across the U.S. reached $136.5 billion, just missing 2018’s record of $140.2 billion.
- Female-founded companies saw record activity in 2019, both with total VC raised ($18.3 billion) and deals (2,184). Companies with all female founders accounted for 2.7 percent of total VC dollars raised, up from 2.2 percent in 2018; startups with at least one female founder accounted for 14.2 percent, up from 12.8 percent.
- VC fundraising reached the second-highest annual total in the past decade at $46.3 billion raised for U.S. venture funds.
- U.S. VC exit value reached a record $256.4 billion across 882 liquidity events.
- “In 2019, we saw the highest exit value ever tracked, record capital deployed to female-founded startups and the most late-stage deals ever closed, to name a few,” PitchBook CEO John Gabbert said in a statement. “The continued proliferation of nontraditional investors participating in VC and the need for LPs to recycle distributed capital back into new VC funds should keep venture momentum strong heading into 2020.”