Most Americans have never heard of Emeryville, California. Those who have probably know it as a place where they got stuck on a traffic-clogged stretch of highway overlooking a giant Ikea.
Yet Emeryville, a largely concrete-surfaced city covering all of two square miles, has a lot more entrepreneurial clout than meets the eye. Companies in this San Francisco Bay Area city of around 10,000 have raised more than half a billion dollars in venture funding over the past three years. That total handily beats much larger metropolises including Dallas, Portland, and even neighboring Oakland.
Emeryville isn’t alone. San Francisco Bay Area companies raise so much venture capital relative to other places that a lot of little-known cities in the region outrank major metropolises in total funding.
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In this two-part series, we’ll look at nine under-the-radar places in the Bay Area that punch above their weight class when it comes to attracting startup funding. For today, we’ll focus on the East Bay, the sprawling, two-county area on the other side of the bridge from San Francisco and Silicon Valley.
Here are some of the cities that made our list:
Hayward is pretty much in the geographic center of the San Francisco Bay Area. Generally speaking, however, this city of 150,000 is known as a place you commute from, rather than commute to.
But that may be shifting. In the past three years, Hayward-based companies have raised more than $490 million in venture funding. That’s more than Portland, Oregon (population 640,000) and more than triple San Antonio, Texas (population 1.5 million).
Even with all that capital flowing in, Hayward doesn’t have a reputation as a startup hub. It’s not where you go to see industrial chic co-working spaces filled with espresso-sipping twentysomethings working on the next killer app. However, Hayward does appeal to companies that need space in a location that’s accessible to most Silicon Valley workers.
In recent years, the majority of Hayward’s venture funding has gone to biotechnology companies, like Arcus Biosciences, a developer of cancer therapies that raised a $70 million round in September, and MicuRX, which develops antibodies to treat drug-resistant infections. Hayward is also making inroads as an energy startup hub. Primus Power, a provider of utility-scale battery storage, is there, as is Alphabet Energy, which is developing technology to convert waste heat to energy.
You’d think the irony gods would ensure any town with the audacity to name itself Pleasanton would be a terrible place to live. But no, Pleasanton really is quite pleasant.
It’s a pricey, family-oriented place with abundant sunshine, good schools, and plenty of dining options. Those attributes contribute to making this burb one of the wealthiest small cities in America.
It’s entrepreneurial too. Over the past three years, Pleasanton-based companies have raked in more than $300 million in venture funding. That puts this city of 80,000 ahead of Miami (pop. 440,000) and about on par with Philadelphia (pop. 1.5 million) over the same period.
From a startup standpoint Pleasanton is best-known as a hub for HR software. Workday is based there, as was PeopleSoft, an early pioneer in the space later acquired by Oracle. The recipients of the largest recent funding rounds, however, hail from biotechnology and energy sectors. They are 10X Genomics, developer of DNA analysis tools, and Fulcrum Bioenergy, which makes fuel out of garbage.
Once considered a sleepy burb, Fremont has evolved over the past couple decades into what is essentially an extension of Silicon Valley. The city’s most famous and largest private employer is none other than Tesla Motors, which churns out its Model S sedans at a former GM plant. It’s also home to some valuable public tech companies, including Lam Research, a semiconductor equipment maker with a market cap of $24 billion, as well as one of Silicon Valley’s most notorious failures, the solar panel maker Solyndra.
While Fremont doesn’t have high name recognition outside of the San Francisco area, it’s a pretty populous city, with around 230,000 residents and the second-largest land area of any municipality in the Bay Area.
These days, a number of younger Fremont-based companies are scaling up in a big way. Over the past three years, Fremont startups have raised more than $600 million. That puts the city ahead of Phoenix (pop. 1.5 million) and about on par with Houston (pop. 2.3 million). Large funding rounds cover a broad range of industries, including biotech, hardware, software, and energy.
The largest funding recipient, flexible display maker Royole, is actually a multi-national startup, with major operations in both Fremont and Shenzen, China. Other heavily funded startups include GlassPoint Solar, a developer of solar steam generators, and Shockwave Medical, in the medical device space.
Venture funding for Oakland companies over the past three years totaled just under $500 million. That’s a big top-line number, but may come as a disappointment to some Oaklanders, as it puts this city of 420,000 basically neck-and-neck with its tiny neighbor Emeryville in securing venture funding for local companies.
Still, nearly half a billion dollars is nothing to sneeze at, and the city has an active startup scene that benefits from close proximity to San Francisco, combined with cheaper rents. Also, Oakland is a foodie town, which is reflected in its big funding rounds. The largest funding recipient is Blue Bottle Coffee, known for serving a brew so strong it makes a case for turning caffeine into a regulated substance.
Another big funding recipient is Revolution Foods, which provides healthy meals for schools and families. Other large rounds cross a range of industries, including media, ecommerce, enterprise software, and healthcare.
We end our journey in Emeryville, the place where all highways seem to meet.
This city packs a lot of business activity into a small space. Pixar is headquartered here, as is toymaker Leapfrog, smoothie chain Jamba juice, and other prominent brands.
Among startups, large funding recipients are a mix of life sciences and tech. Zymergen, a synthetic biology startup, is the biggest funding recipient, with $170 million in venture funding to date, and Bolt Threads, which has raised $90 million to develop manmade fabrics based on the properties of spider silk, is among the highest profile VC-backed companies.
Why Emeryville? The better question may be: Why not? It’s accessible to most of the metro region and has a high concentration of retail and restaurants, as well as plenty of office space. Much of that space comes with bay views, too — a lovely blue expanse you can see across the 12 lanes of traffic.
Illustration: Li-Anne Dias
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