VC Investment Is Up More Than 1,000% in 3 U.S. Cities

Originally posted on DC Inno, on February 11, 2016, by Kyle Coffee

We can track the evolution of emerging tech hubs with a wide range of indicators. IPOs, acquisitions, unicorn valuations and funding rounds are just a few. And when you start to look at change over time instead of just totals, several cities outside of Silicon Valley start to look really impressive.

The National Venture Capital Association recently released its report on capital investment in metropolitan statistical areas in the U.S. for 2015, analyzing 133 markets in which at least one deal was made. The dramatic results? Well, Silicon Valley (specifically, the San Francisco metro area) is still king, with 797 companies receiving more than $21 billion in 2015. The New York, San Jose and Boston metro areas round out the top four, with almost $7 billion, $6.2 billion and $5.6 billion raised, respectively.

Of course, not all venture capital funnels into those four markets, and perhaps a more intriguing exercise would be to take a look at the cities that made huge leaps in total funding dollars compared to 2014. These markets haven’t had the steady and long-term investment success and growth of a San Francisco or a Boston, but the sudden uptick could mark the beginning of a trend that would soon make them major players among other established startup cities. Below are the three that experienced the highest growth in tech dollar investment between 2014 and 2015, per NVCA’s study.

Boise, Idaho

2015 Investment: $63 million

Year-Over-Year Change: 3,269 percent

With a staggering 3,269 percent jump in investment money, Boise had the biggest surge in VC funding in 2015. However, unlike Miami’s healthcare sector rise, the success of Boise hinged on fewer deals of higher dollar amounts. In particular, network solutions company Cradlepoint hit it big with a $48 million Series B funding in April. Cradlepoint focused on using the funds to acquire, which it did later by buying software-defined networking company Pertino.

Then in December, fraud detection organization Kount hit it big with an $80 million announcement (this investment was from private equity, rather than VC funds). Kount protects users from online and mobile payment fraud, and its emergence asserts the company’s place in a cyber security field traditionally crowded with Boston and DC-Virginia pillars.

CVC Capital Partners Managing Partner John Clark assessed Boise’s evolution, explaining that the investment aligns with company strategy of “partnering with uniquely positioned technology companies in large, growing markets.” With these investments and the continued presence of Boise anchor Micron Technology, it’s worth keeping your eyes trained on Idaho’s most populous city.

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