Among today’s early-stage startups, it’s pretty safe to assume that at least a few will go on to become tomorrow’s industry leaders. Which ones, we cannot tell.
What we can do a better job of predicting, however, is where those future leaders will be based. That’s because most U.S. startup funding goes to a few well-established tech hubs. While not all early-stage companies in a given hub will flourish, it’s reasonable to expect some will make it big.
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With that in mind, Crunchbase News took a look at early-stage funding across U.S. states. We wanted to see which states are seeing the largest surges in Series A and B investment, as well as those with declining funding.
Overall, the picture is pretty bullish. That’s unsurprising, as U.S. funding overall is way up, with $20.2 billion so far this year going to early-stage rounds (Series A and B), per Crunchbase data1 That’s a rise of 66 percent compared to the same period last year.
However, the gains are not evenly distributed among states. The biggest gainers among the top 16 states for startup funding were largely clustered around the Mid-Atlantic region, with Colorado, Utah and Massachusetts also posting big funding increases.
We lay out the state-by-state funding totals in the chart below:
The size of the typical early-stage round has risen. That means the number of deals this year has not risen by as large a percentage as the investment totals. Round counts are still up, however, with 739 Series A and B deals in the U.S. in 2021, up from 662 in the same period last year. We lay out the breakdown of funding rounds in top states below:
A few takeaways
Looking over the numbers, a few trend lines seem to emerge. Early-stage investment totals can fluctuate widely quarter to quarter, particularly in smaller tech hubs, so we’ll refrain from over-predicting. Nonetheless, here are some of the highlights:
Massachusetts boosted by biotech: Massachusetts did well on the early-stage front this year mostly because of its biotech prowess. Out of 14 rounds of $100 million and up statewide this year, all but one were life sciences companies in the Boston metro area. This isn’t entirely surprising as biotech is one of the more likely venture-backed sectors to see outsize rounds at Series A and B stage, as companies in the space are quite expensive to scale.
Mid-Atlantic on the rise: States in and bordering the Mid-Atlantic Region boasted some of the biggest gains on our list. New York roughly doubled, amid a blowout year for the Big Apple’s startup scene. Pennsylvania early-stage startup funding nearly quadrupled compared to the same period last year. Maryland and Virginia were also way up. Meanwhile, North Carolina — which saw the biggest year-over-year percentage gain in early-stage funding — is considered a Southern State. But it also border’s the Mid-Atlantic region, so we’ll include it here for convenience’s sake.
Rocky Mountains highs: Colorado and Utah were also riding high in our survey of early-stage funding. Series A and B rounds for Colorado companies more than quadrupled, while Utah also surged. Round count gains were far smaller in both states, indicating it’s large deal size rather than quantity that’s driving the gains.
California still dominant, but less so: California, the dominant state for startup investment, saw early-stage funding rise 50 percent year over year. This is quite strong, but nonetheless below the national average.
The big picture: Early-stage geography gets more spread out
We don’t have enough data here to make a broad call on the future of the Golden State startups. But it does seem to show we’re slowly moving to a venture-funding ecosystem that’s a bit more broadly distributed among more states.
The overwhelming majority of money is still going to established tech and biotech hubs. But it seems as if in these bullish times for venture funding, most of the tech hub metro areas are taking part in the boom.
Note: Data queries for year-to-date funding were aggregated on April 14, 2021, and have risen slightly since then.
Illustration: Dom Guzman
The data for this report was based on Crunchbase records of Series A and B rounds. For our quarterly reports, we also include some rounds not explicitly labeled as Series A or B as early stage, based on attributes such as round size, which leads to higher totals for early stage.↩
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