VCs serve up a large helping of cash to startups disrupting food

Here is what your daily menu might look like if recently funded startups have their way. You’ll start the day with a nice, lightly caffeinated cup of cheese tea. Chase away your hangover with a cold bottle of liver-boosting supplement. Then slice up a few strawberries, fresh-picked from the corner shipping container. Lunch is full of options. Perhaps a tuna sandwich made with a plant-based, tuna-free fish. Or, if you’re feeling more carnivorous, grab a grilled chicken breast fresh from the lab that cultured its cells, while crunching on a side of mushroom chips. And for extra protein, how about a brownie? Dinner might be a pizza so good you send your compliments to the chef — only to discover
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US startups off to a strong M&A run in 2018

With Microsoft’s $7.5 billion acquisition of GitHub this week, we can now decisively declare a trend: 2018 is shaping up as a darn good year for U.S. venture-backed M&A. So far this year, acquirers have spent just over $20 billion in disclosed-price purchases of U.S. VC-funded companies, according to Crunchbase data. That’s about 80 percent of the 2017 full-year total, which is pretty impressive, considering we’re barely five months into 2018. If one included unreported purchase prices, the totals would be quite a bit higher. Fewer than 20 percent of acquisitions in our data set came with reported prices.1 Undisclosed prices are mostly for smaller deals, but not always. We put together a list of a
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Scaling startups are setting up secondary hubs in these cities

America’s mayors have spent the past nine months tripping over each other to curry favor with Amazon.com in its high-profile search for a second headquarters. More quietly, however, a similar story has been playing out in startup-land. Many of the most valuable venture-backed companies are venturing outside their high-cost headquarters and setting up secondary hubs in smaller cities. Where are they going? Nashville is pretty popular. So is Phoenix. Portland and Raleigh also are seeing some jobs. A number of companies also have a high number of remote offerings, seeking candidates with coveted skills who don’t want to relocate. Those are some of the findings from a Crunchbase News analysis of the geographic hiring practices of U.S. unicorns. Since most of these companies are based in high-cost locations, like the San Francisco Bay Area, Boston and New York, we were looking to see if there is a pattern of setting
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Here is where CEOs of heavily funded startups went to school

CEOs of funded startups tend to be a well-educated bunch, at least when it comes to university degrees. Yes, it’s true college dropouts like Mark Zuckerberg and Bill Gates can still do well. But Crunchbase data shows that most startup chief executives have an advanced degree, commonly from a well-known and prestigious university. Earlier this month, Crunchbase News looked at U.S. universities with strong track records for graduating future CEOs of funded companies. This unearthed some findings that, while interesting, were not especially surprising. Stanford and Harvard topped the list, and graduates of top-ranked business schools were particularly well-represented. In this next installment of our CEO series, we narrowed the data set. Specifically, we looked at CEOs of U.S. companies funded in the past three years that have raised at least $100 million in total venture financing. Our intent was to see whether educational backgrounds of unicorn and
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Shared housing startups are taking off

When young adults leave the parental nest, they often follow a predictable pattern. First, move in with roommates. Then graduate to a single or couple’s pad. After that comes the big purchase of a single-family home. A lawnmower might be next. Looking at the new home construction industry, one would have good reason to presume those norms were holding steady. About two-thirds of new homes being built in the U.S. this year are single-family dwellings, complete with tidy yards and plentiful parking. In startup-land, however, the presumptions about where housing demand is going looks a bit different. Home sharing is on the rise, along with more temporary lease options, high-touch service and smaller spaces in sought-after urban locations.

Seeking roommates and venture capital

Crunchbase News analysis of residential-focused real estate startups uncovered a raft of companies with a shared and temporary housing focus that have raised funding in
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These schools graduate the most funded startup CEOs

There is no degree required to be a CEO of a venture-backed company. But it likely helps to graduate from Harvard, Stanford or one of about a dozen other prominent universities that churn out a high number of top startup executives. That is the central conclusion from our latest graduation season data crunch. For this exercise, Crunchbase News took a look at top U.S. university affiliations for CEOs of startups that raised $1 million or more in the past year. In many ways, the findings weren’t too different from what we unearthed almost a year ago, looking at the university backgrounds of funded startup founders. However, there were a few twists. Here are some key findings: Harvard fares better in its rivalry with Stanford when it
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The formula behind San Francisco’s startup success

Why has San Francisco’s startup scene generated so many hugely valuable companies over the past decade? That’s the question we asked over the past few weeks while analyzing San Francisco startup funding, exit, and unicorn creation data. After all, it’s not as if founders of Uber, Airbnb, Lyft, Dropbox and Twitter had to get office space within a couple of miles of each other. We hadn’t thought our data-centric approach would yield a clear recipe for success. San Francisco private and newly public unicorns are a diverse bunch, numbering more than 30, in areas ranging from ridesharing to online lending. Surely the path to billion-plus valuations would be equally varied. But surprisingly, many of their secrets to success seem formulaic. The most valuable San Francisco companies to arise in the era of the smartphone have a number of shared traits, including a willingness and ability to post massive, sustained
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US early-stage investment share shrinks as China surges

The global early-stage investment pie is getting bigger… a lot bigger. Just four years ago, investors were putting less than $10 billion per quarter into early-stage deals (Series A and B). The past two quarters, however, have all come in over twice that level. Q1 2018, meanwhile, looks to be a record-setting one, with Crunchbase projecting $25 billion in global early-stage investment. But while overall investment is on the rise, the U.S.’ share is dwindling. A few years ago, North American startups reliably received at least two-thirds of global early-stage investment. No more. For the past three quarters, North America’s share has dwindled to less than half, as the chart below illustrates: The rise of China’s startup scene, combined with local investors’ penchant for jumbo-sized Series A rounds, goes a long way to explaining the shift. Venture ecosystems in Southeast Asia, Brazil and elsewhere have also
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Hip hop finds its beat in the startup scene

Hip hop stars are taking their reputations to Wall Street and Sand Hill road. Unlike their rock star brethren, who’ve historically been disinterested in dabbling with startups, quite a few hip hop artists have amassed good-sized portfolios. They’ve seen a few big hits too, most recently including a massive up round for zero-commission stock trading platform Robinhood, which counted Jay-Z, Nas and Snoop Dogg among its earlier backers. But just how deep does the hip hop-startup relationship go and where is it headed? To shed some light on that question, we put together a review of Crunchbase data on the startup investment activity of famous musicians. We looked at both hip hop and pop stars, culling a list of 21 artists who are either active investors or have joined one or more rounds in recent years. The general conclusion: Artists are doing more deals, raising more funds and
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Late-blooming startups can still thrive

It seems like startup news is full of overnight success stories and sudden failures, like the scooter rental company that went from zero to a $300 million valuation in months or the blood-testing unicorn that went from billions to nearly naught. But what about those other companies that mature more gradually? Is there such a thing as slow and successful in startup-land? To contemplate that question, Crunchbase News set out to assemble a data set of top late-blooming startups. We looked at companies that were founded in or before 2010 that raised large amounts of capital after 2015, and we also looked at companies founded a least five years ago that raised large early-stage funds in the last year. (For more details on the rules we used to select the companies, check “Data Methods” at the end of the post.) The exercise was a counterpoint to a data
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Corporate bio VCs are backing more rounds and making bigger bets

 Biotech is a lot like venture capital. Vast amounts of research, testing and marketing go into a wide range of therapies. But in the end, it’s just a tiny fraction that deliver most returns. That similarity may be why most of the biggest biotech and pharmaceutical companies have a long history of engaging in the venture business as startup investors, spin-out creators and strategic partners. Read More

South Korea aims for startup gold

 Back in 2011, when South Korea won its longshot bid to host the 2018 Winter Olympics, the country wasn’t widely recognized as a destination for ski and snow lovers. It wasn’t considered much of a tech startup hub either. Fast forward seven years and a lot has changed. Read More

These startup exits delivered the biggest bang for the buck

 Big IPOs by the best-known brands tend to dominate attention in startup circles. But when it comes to delivering significant returns on invested capital, it’s often lower-profile companies that come out on top. We look at some of the top-returning large exits, first for tech and Internet companies, and then for life sciences. Read More

US & Canada VCs favor late-stage giants over upstarts in Q4

 Startup investors in the U.S. and Canada have been putting a little less money to work across a lot fewer deals in recent months. After three quarters of rising investment at early through growth stage, VCs have cut back in the fourth quarter of 2017. We look at some of the key data points for the just-ended quarter and year, including early and late-stage funding, round counts, M&A and IPOs. Read More

Looking back at SoftBank’s big year

 While VCs vie to fund massively scalable businesses, they tend to view their own industry as size-constrained. Common wisdom is that with a limited supply of successful startups, greatly inflating the amount of available capital to invest in them leads to asset bubbles. This year, SoftBank’s Vision fund has been putting that assumption to an unprecedented test. Read More

Apple has a history of choosing cash over startups

 Apple has more cash than any other tech company on the planet. Yet, that hasn’t translated into spending on acquisitions. Over the past five years, Apple has spent the least on M&A out of all the “Big Five” most valuable U.S. tech companies. That’s despite the fact that it is estimated to have more than $260 billion in cash and cash equivalents. So, is it buying… Read More

How tax changes may impact US startups

 In an effort to envision how the pending tax bill might affect U.S. startups and their investors, Crunchbase News reached out to tech industry taxation experts. We touched the M&A climate, tax treatment of interest expenses and whether rising costs of living in high-tax states will prompt an exodus to cheaper locales. Here, then, are some thoughts on the potential impacts. Read More

Virtual reality gets its groove back

 Technophiles tend to overestimate the pace of mass adoption. For example, virtual reality fans expected a lot more of us to be whiling away our days with goggles stuck to faces, immersed in virtual worlds. Instead, we’re still glued to our cell phones. Yet while virtual and augmented reality uptake may be slower than boosters expected or hoped, venture investment hasn’t slackened. Read More