Is the next Silicon Valley actually just...Silicon Valley?
If AI is truly the next technological wave, then that wave is centered in the Bay Area.
I'm starting to put together some year-end analysis wrapping up this kinda dismal year in startups (by the way, open to ideas if you want specific graphics), and it just made sense to start with the only bright spot: AI.
Investment into AI startups boomed in 2023, rising from $2.2 billion to over $7.5 billion in a single year. Honestly feels a little silly to use 2022 as a baseline, given that the Cambrian moment of ChatGPT happened last November.
So - who benefited from the only surging investment trend in venture?
The San Francisco / San Jose Bay Area.
Companies in the Bay raised about 31% of all startup capital on Carta in 2023. That's actually down slightly from prior years.
But Bay Area companies took in 49% of all capital invested into AI companies, 35x as much as the next closest metro area New York.
𝗦𝗼𝗺𝗲 𝗔𝗜 𝗱𝗮𝘁𝗮 𝗵𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:
Investment into AI companies is more geographically concentrated. The top 10 metro areas for overall investment took in about 74% of all capital, whereas the top 10 for AI took in 86%.
New York and Pittsburgh were the only other metro areas where their share of AI investment was larger than their share of investment overall.
Congrats to Pittsburgh for taking in 1.4% of all AI capital, 9th most of any metro (while being in the high teens in total investment).
If you segment the data to only early-stage rounds (Seed and Series A), the SF lead holds fairly steady but Boston and New York are neck and neck.
Across this dataset, valuations and round sizes for AI companies came in above the general medians, no matter the stage or location. It really has been the year of AI in startups.
Will that hold in 2024? Will there be a new theme that jumps ahead? Or is the Bay Area destined to hold on to this early lead? Would love to hear your thoughts.
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#cartadata #AI #startups #fundraising #BayArea #founders
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