Getting personal: Funding rises for software-driven tastemakers

It has the feel of a science fiction plot. A young man heads online to look up deals on things he likes. Slowly, the tables turn. Now, it’s the computer that starts telling him what he wants. Buy these pants. Play this song. Eat this pizza. Date this girl. Read news with this political spin… OK, I lied. This isn’t sci-fi at all. It’s the current reality. And it’s the kind of thing venture capitalists seem keen on funding. An analysis of Crunchbase data shows that global venture funding for personalization and recommendation platforms has surged in recent quarters. Investors are pouring billions into the space, creating a string of newly minted unicorns relying on algorithms to customize music streams, news feeds and much
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The alumni of these universities raised the most VC in the past year

Whatever criteria we look at, whether it’s schools with the highest number of well-capitalized founders, highest funding totals or even where startup investors went to college, the same names top the list. The only surprise factor, it seems, is whether Harvard or Stanford will be in first place. It’s possible we’ll do a data-driven university- and startup-related ranking that doesn’t feature the same two schools in the top two positions. But that’s not happening today, as we look at universities with founder alumni who have raised the most venture funding.1

OK, so who else is on the list?

Luckily, there are more than two names on the list. In this survey, we looked at the top 15 schools ranked by alumni who
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Global unicorn exits hit multi-year high in 2018

Unicorn exits are taking flight. With the IPO window wide open, an apparent record number of venture-backed companies privately valued over $1 billion have launched public offerings this year. Crunchbase data shows 23 unicorn IPOs globally so far in 2018, well outpacing full-year totals for 2016 and 2017. Collectively, this year’s newly public unicorns are doing pretty well too. Most priced shares around or above expectations. We’re also seeing a lot of impressive aftermarket gains. At least six are currently valued at more than $10 billion. Meanwhile, unicorn M&A volumes are chugging along as well, with at least 11 deals so far this year. Big transactions like Walmart’s $16 billion acquisition of Flipkart and Microsoft’s $7.5 billion purchase of GitHub have helped boost the
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Boston-area startups are on pace to overtake NYC venture totals

Boston has regained its longstanding place as the second-largest U.S. startup funding hub. After years of trailing New York City in total annual venture investment, Massachusetts is taking the lead in 2018. Venture investment in the Boston metro area hit $5.2 billion so far this year, on track to be the highest annual total in years. The Massachusetts numbers year-to-date are about 15 percent higher than the New York City total. That puts Boston’s biotech-heavy venture haul apparently second only to Silicon Valley among domestic locales thus far this year. And for New England VCs, the latest numbers also confirm already well-ingrained opinions about the superior talents of local entrepreneurs. “Boston often gets dismissed as a has-been startup city. But the successes are often
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Home run exits happen stealthily for biotech

Startup exit tallies commonly underestimate biotech returns. Unlike most tech deals, the biggest profits in bio often come long after an IPO or acquisition. Take Juno Therapeutics, a publicly traded cancer immunology company that sold to pharma giant Celgene this year for $9 billion. At first glance, it doesn’t seem like a deal that would impact Juno’s early investors. After all, Juno went public back in 2014. Though the Seattle company raised more than $300 million as a private company, pre-IPO backers had years to cash out at healthy multiples. Yet some held on. Bob Nelsen, managing director of ARCH Venture Partners, Juno’s largest VC backer, told Crunchbase News that his firm was still holding nearly its entire 15 percent pre-IPO stake when Celgene bought the
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While tech waffles on going public, biotech IPOs boom

For people who make investment decisions based on revenues and projected earnings, biotech IPOs are kind of a non-starter. Not only are new market entrants universally unprofitable, most have zero revenue. Going public is mostly a means to raise money for clinical trials, with red ink expected for years to come. That pattern may be one reason the venture capital press, Crunchbase News included, tends to devote a disproportionately small portion of coverage to biotech IPOs. It’s more exciting to watch a big-name internet company pop in first-day trading or poke fun at an underperforming dud. But with our fixation on all things tech, we’re missing out on the big picture. There are actually a lot more biotech and healthcare startup IPOs than tech offerings. In the second quarter of this year, for instance, at least 16 U.S. venture-backed biotech and healthcare companies went public, compared to just 11 tech startups.
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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