A woman walks by an office building.A woman walks by an office building near New Delhi, India. Adnan Abidi/Reuters

The biggest challenges to the Bay Area's dominance in tech will likely come from overseas.

The San Francisco Bay Area remains the world's leading hub of startups, but cities outside of America are making considerable gains, according to a new report by CB Insights, one of the leading trackers of venture-capital investment in high-tech startups. Although Silicon Valley is still "off the charts ... Beijing and Shanghai are poised to be the tech hubs of the future," the report notes.  

With $140 billion of VC investment in tech startups since 2012, the Bay Area tops the list of startup hubs. But Beijing comes next, with $72 billion. New York takes third place ($36 billion) and Shanghai fourth ($23 billion).

The Bay Area also leads in individual VC investments, or startup "deals." Chinese cities—which are home to more large-scale investments—fall further behind on this metric. New York, London, and Los Angeles take second, third, and fourth places on this list. Beijing comes fifth; Boston sixth; and Shanghai seventh, with Seattle, Austin, and Bengaluru (or Bangalore) rounding out the top 10.

Number of Tech Deals by Metro Region Since 2012

(Source: CB Insights)

The biggest gainers in venture-capital startup funding have mainly been cities outside the United States: in Europe (London, Amsterdam and Paris); in Asia (Beijing, Shanghai, and Tokyo); and in other regions (Mumbai, São Paulo, Tel Aviv, and Toronto). Other cities that stand out for significant growth in startup deals are Stockholm, Amsterdam, Barcelona, Sydney, and New Delhi.

The pattern in the U.S. is decidedly mixed. East Coast hubs like New York and Boston have seen growth in startup funding, but San Francisco and other West Coast hubs, including Los Angeles and Seattle, have seen declines.

Percent Change in Funding to Startups, 2014-15 Versus 2016-17

(Source: CB Insights)

Startup hubs break down into three main types, according to the report. Heavyweight hubs are the world's most dominant and established—the places that generate the cutting-edge, industry-defining companies, with the most companies and the highest levels of venture investment. The Bay Area, New York, London, Los Angeles, Boston, and Tel Aviv top this list. (Tel Aviv rakes in the most foreign investment, mostly from Europe and the United States; foreign investment accounts for more than 70 percent of its venture-funding rounds.)

Equity Deals in Heavyweight Hubs, 2012-17

(Source: CB Insights)

The next tier, high-growth hubs, includes Austin and Seattle in the U.S.; Paris and Berlin in Europe; Beijing and Shanghai in China; Bangalore and New Delhi in India; Tokyo, and Toronto. Beijing and Shanghai particularly stand out, with a high level of funding for so-called tech "unicorns" (a unicorn is a private startup valued at more than $1 billion). Those cities also have the highest share of exits (when an entrepreneur sells their company or share of it) over $100 million.

A third tier, up-and-comer hubs, includes Denver and Vancouver; Amsterdam, Stockholm, and Barcelona; Mumbai and Seoul; São Paulo, and Sydney. These smaller hubs have fewer deals and less investment, but have seen considerable growth and high foreign investment in recent years. Seoul leads the pack for most corporate investments, with nearly 40 percent, many by Chinese companies.

The report also lists a few other aspiring startup hubs, such as Hangzhou, China, which houses e-commerce giant Alibaba; Montreal; and Washington, D.C., which saw its venture-capital deals grow by more than 150 percent from 2016 to 2017.

  • A man bikes down a busy London street with a food-delivery box on the back of his bike.
  • A fountain surrounded by downtown buildings

The world of startups and VC investment remains concentrated, clustered, and spiky, with a relatively small number of heavyweight hubs accounting for the lion's share of investment. Although San Francisco remains the world's preeminent hub, its dominance may be starting to fade, as large cities like New York and London—and Beijing and Shanghai—emerge as major challengers.

Much has been made in America of the emergence of smaller Rust Belt cities, such as Pittsburgh and Detroit, and places like Nashville as alternatives to the Bay Area and up-and-coming startup hubs. But there is little evidence that this is occurring at any significant level: Only Denver makes the list of high-growth or emerging startup hubs. The rise of global startup hubs around the world is something I am studying in greater detail with my colleague Ian Hathaway, whose research on U.S. startups I will write about later this week.

Many commentators (myself included) have seen President Trump's moves to limit immigration, engage in trade wars, cut social spending, and stoke the fires of class and racial divides as ultimately undermining America's long-held dominance in talent and technology. The rapid rise of foreign startup ecosystems suggests that America's historic advantage in VC-financed startups may already be giving way.

Richard Florida

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto's School of Cities and Rotman School of Management, and a distinguished fellow at New York University's Schack Institute of Real Estate.

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A woman walks by an office building.A woman walks by an office building near New Delhi, India. Adnan Abidi/Reuters

The biggest challenges to the Bay Area's dominance in tech will likely come from overseas.

The San Francisco Bay Area remains the world's leading hub of startups, but cities outside of America are making considerable gains, according to a new report by CB Insights, one of the leading trackers of venture-capital investment in high-tech startups. Although Silicon Valley is still "off the charts ... Beijing and Shanghai are poised to be the tech hubs of the future," the report notes.  

With $140 billion of VC investment in tech startups since 2012, the Bay Area tops the list of startup hubs. But Beijing comes next, with $72 billion. New York takes third place ($36 billion) and Shanghai fourth ($23 billion).

The Bay Area also leads in individual VC investments, or startup "deals." Chinese cities—which are home to more large-scale investments—fall further behind on this metric. New York, London, and Los Angeles take second, third, and fourth places on this list. Beijing comes fifth; Boston sixth; and Shanghai seventh, with Seattle, Austin, and Bengaluru (or Bangalore) rounding out the top 10.

Number of Tech Deals by Metro Region Since 2012

(Source: CB Insights)

The biggest gainers in venture-capital startup funding have mainly been cities outside the United States: in Europe (London, Amsterdam and Paris); in Asia (Beijing, Shanghai, and Tokyo); and in other regions (Mumbai, São Paulo, Tel Aviv, and Toronto). Other cities that stand out for significant growth in startup deals are Stockholm, Amsterdam, Barcelona, Sydney, and New Delhi.

The pattern in the U.S. is decidedly mixed. East Coast hubs like New York and Boston have seen growth in startup funding, but San Francisco and other West Coast hubs, including Los Angeles and Seattle, have seen declines.

Percent Change in Funding to Startups, 2014-15 Versus 2016-17

(Source: CB Insights)

Startup hubs break down into three main types, according to the report. Heavyweight hubs are the world's most dominant and established—the places that generate the cutting-edge, industry-defining companies, with the most companies and the highest levels of venture investment. The Bay Area, New York, London, Los Angeles, Boston, and Tel Aviv top this list. (Tel Aviv rakes in the most foreign investment, mostly from Europe and the United States; foreign investment accounts for more than 70 percent of its venture-funding rounds.)

Equity Deals in Heavyweight Hubs, 2012-17

(Source: CB Insights)

The next tier, high-growth hubs, includes Austin and Seattle in the U.S.; Paris and Berlin in Europe; Beijing and Shanghai in China; Bangalore and New Delhi in India; Tokyo, and Toronto. Beijing and Shanghai particularly stand out, with a high level of funding for so-called tech "unicorns" (a unicorn is a private startup valued at more than $1 billion). Those cities also have the highest share of exits (when an entrepreneur sells their company or share of it) over $100 million.

A third tier, up-and-comer hubs, includes Denver and Vancouver; Amsterdam, Stockholm, and Barcelona; Mumbai and Seoul; São Paulo, and Sydney. These smaller hubs have fewer deals and less investment, but have seen considerable growth and high foreign investment in recent years. Seoul leads the pack for most corporate investments, with nearly 40 percent, many by Chinese companies.

The report also lists a few other aspiring startup hubs, such as Hangzhou, China, which houses e-commerce giant Alibaba; Montreal; and Washington, D.C., which saw its venture-capital deals grow by more than 150 percent from 2016 to 2017.

  • A man bikes down a busy London street with a food-delivery box on the back of his bike.
  • A fountain surrounded by downtown buildings

The world of startups and VC investment remains concentrated, clustered, and spiky, with a relatively small number of heavyweight hubs accounting for the lion's share of investment. Although San Francisco remains the world's preeminent hub, its dominance may be starting to fade, as large cities like New York and London—and Beijing and Shanghai—emerge as major challengers.

Much has been made in America of the emergence of smaller Rust Belt cities, such as Pittsburgh and Detroit, and places like Nashville as alternatives to the Bay Area and up-and-coming startup hubs. But there is little evidence that this is occurring at any significant level: Only Denver makes the list of high-growth or emerging startup hubs. The rise of global startup hubs around the world is something I am studying in greater detail with my colleague Ian Hathaway, whose research on U.S. startups I will write about later this week.

Many commentators (myself included) have seen President Trump's moves to limit immigration, engage in trade wars, cut social spending, and stoke the fires of class and racial divides as ultimately undermining America's long-held dominance in talent and technology. The rapid rise of foreign startup ecosystems suggests that America's historic advantage in VC-financed startups may already be giving way.

Richard Florida

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto's School of Cities and Rotman School of Management, and a distinguished fellow at New York University's Schack Institute of Real Estate.

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  3. Equity

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  4. Abandoned, derelict city rowhouses.
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    As empty homes sit in purgatory, neighborhoods fray and cities are left to pick up the bill.

  5. A skateboarder in an empty parking lot
    Transportation

    A new study documents the huge amount of space taken up by parking, and the astronomical costs it represents, in five U.S. cities.

A woman walks by an office building.A woman walks by an office building near New Delhi, India. Adnan Abidi/Reuters

The biggest challenges to the Bay Area's dominance in tech will likely come from overseas.

The San Francisco Bay Area remains the world's leading hub of startups, but cities outside of America are making considerable gains, according to a new report by CB Insights, one of the leading trackers of venture-capital investment in high-tech startups. Although Silicon Valley is still "off the charts ... Beijing and Shanghai are poised to be the tech hubs of the future," the report notes.  

With $140 billion of VC investment in tech startups since 2012, the Bay Area tops the list of startup hubs. But Beijing comes next, with $72 billion. New York takes third place ($36 billion) and Shanghai fourth ($23 billion).

The Bay Area also leads in individual VC investments, or startup "deals." Chinese cities—which are home to more large-scale investments—fall further behind on this metric. New York, London, and Los Angeles take second, third, and fourth places on this list. Beijing comes fifth; Boston sixth; and Shanghai seventh, with Seattle, Austin, and Bengaluru (or Bangalore) rounding out the top 10.

Number of Tech Deals by Metro Region Since 2012

(Source: CB Insights)

The biggest gainers in venture-capital startup funding have mainly been cities outside the United States: in Europe (London, Amsterdam and Paris); in Asia (Beijing, Shanghai, and Tokyo); and in other regions (Mumbai, São Paulo, Tel Aviv, and Toronto). Other cities that stand out for significant growth in startup deals are Stockholm, Amsterdam, Barcelona, Sydney, and New Delhi.

The pattern in the U.S. is decidedly mixed. East Coast hubs like New York and Boston have seen growth in startup funding, but San Francisco and other West Coast hubs, including Los Angeles and Seattle, have seen declines.

Percent Change in Funding to Startups, 2014-15 Versus 2016-17

(Source: CB Insights)

Startup hubs break down into three main types, according to the report. Heavyweight hubs are the world's most dominant and established—the places that generate the cutting-edge, industry-defining companies, with the most companies and the highest levels of venture investment. The Bay Area, New York, London, Los Angeles, Boston, and Tel Aviv top this list. (Tel Aviv rakes in the most foreign investment, mostly from Europe and the United States; foreign investment accounts for more than 70 percent of its venture-funding rounds.)

Equity Deals in Heavyweight Hubs, 2012-17

(Source: CB Insights)

The next tier, high-growth hubs, includes Austin and Seattle in the U.S.; Paris and Berlin in Europe; Beijing and Shanghai in China; Bangalore and New Delhi in India; Tokyo, and Toronto. Beijing and Shanghai particularly stand out, with a high level of funding for so-called tech "unicorns" (a unicorn is a private startup valued at more than $1 billion). Those cities also have the highest share of exits (when an entrepreneur sells their company or share of it) over $100 million.

A third tier, up-and-comer hubs, includes Denver and Vancouver; Amsterdam, Stockholm, and Barcelona; Mumbai and Seoul; São Paulo, and Sydney. These smaller hubs have fewer deals and less investment, but have seen considerable growth and high foreign investment in recent years. Seoul leads the pack for most corporate investments, with nearly 40 percent, many by Chinese companies.

The report also lists a few other aspiring startup hubs, such as Hangzhou, China, which houses e-commerce giant Alibaba; Montreal; and Washington, D.C., which saw its venture-capital deals grow by more than 150 percent from 2016 to 2017.

  • A man bikes down a busy London street with a food-delivery box on the back of his bike.
  • A fountain surrounded by downtown buildings

The world of startups and VC investment remains concentrated, clustered, and spiky, with a relatively small number of heavyweight hubs accounting for the lion's share of investment. Although San Francisco remains the world's preeminent hub, its dominance may be starting to fade, as large cities like New York and London—and Beijing and Shanghai—emerge as major challengers.

Much has been made in America of the emergence of smaller Rust Belt cities, such as Pittsburgh and Detroit, and places like Nashville as alternatives to the Bay Area and up-and-coming startup hubs. But there is little evidence that this is occurring at any significant level: Only Denver makes the list of high-growth or emerging startup hubs. The rise of global startup hubs around the world is something I am studying in greater detail with my colleague Ian Hathaway, whose research on U.S. startups I will write about later this week.

Many commentators (myself included) have seen President Trump's moves to limit immigration, engage in trade wars, cut social spending, and stoke the fires of class and racial divides as ultimately undermining America's long-held dominance in talent and technology. The rapid rise of foreign startup ecosystems suggests that America's historic advantage in VC-financed startups may already be giving way.

Richard Florida

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto's School of Cities and Rotman School of Management, and a distinguished fellow at New York University's Schack Institute of Real Estate.

  1. Maps

    Some cities' roads follow regimented grids. Others twist and turn. See it all on one chart.

  2. Design

    SNAP benefits add up to $1.86 per person, per meal. Here's what that looks like.

  3. Equity

    A new simulation may shed light on the living preferences of the largest generation in American history.

  4. Abandoned, derelict city rowhouses.
    Life

    As empty homes sit in purgatory, neighborhoods fray and cities are left to pick up the bill.

  5. A skateboarder in an empty parking lot
    Transportation

    A new study documents the huge amount of space taken up by parking, and the astronomical costs it represents, in five U.S. cities.