While COVID-19 made its way across the globe, venture capital firms, venture capitalists and startups alike feared major venture funding slowdowns. A significant decrease in venture funding also spells trouble for sales professionals–new opportunities are scarce, and current prospects are forced to shift priorities and tighten budgets.
In the latest Crunchbase report, The State of Global Venture Funding During COVID-19, we took a look at the Crunchbase dataset to determine how these early 2020 predictions held up. To do that, we analyzed global, country and region-specific funding performance.
In this article, we focus specifically on funding insights in the U.S., one of the most active venture funding ecosystems in the world, which drove the majority of North America’s funding (97 percent), and nearly half of venture funding across the globe. To provide salespeople a better understanding of where pockets of opportunity may exist in the second half of 2020, we focused on the Southern, Western, Northeastern and Midwestern regions.
Here’s how each major U.S. region has fared in 2020 thus far, listed in order of highest total venture funding amount (based on Crunchbase funding data as of Sept. 1, 2020):
Western U.S.
It comes as no surprise that the Western U.S. saw the highest total amount of venture funding in 2020 thus far, clocking in at an impressive $53.4 billion. That’s over $30 billion more than the next highest region, the Northeastern U.S., which came in at $22.2 billion.
This dominance in funding was largely driven by California, which accounted for over 90 percent of the Western region’s funding in 2020. Given the West’s focus on technology and continued push into digital transformation, it’s also no surprise that software accounted for nearly 50 percent of the total venture funding in the region in 2020. However, transportation also gained traction–the transportation industry saw the two largest funding rounds in 2020 (Waymo and SpaceX).
The top five funding rounds in the Western U.S. in 2020 thus far were raised by:
- Waymo
- HQ: Mountain View, California
- New Funding: $2.3 billion venture round (March 2, 2020)
- Total Venture Funding: $3 billion
- Waymo improves transportation by developing self-driving technology developed in Google’s labs.
- SpaceX
- HQ: Hawthorne, California
- New Funding: $1.9 billion venture round (Aug. 18, 2020)
- Total Venture Funding: $5.1 billion
- SpaceX is an aviation and aerospace company that designs, manufactures and launches advanced rockets and spacecraft.
- Vantage Data Centers
- HQ: Santa Clara, California
- New Funding: $1.2 billion private-equity round (July 7, 2020)
- Total Venture Funding: $2 billion
- Vantage Data Centers is a company that provides data center solutions.
- Airbnb
- HQ: San Francisco
- New Funding: $1 billion private-equity round (April 6, 2020)
- Total Venture Funding: $4.4 billion
- Airbnb is an online community marketplace for people to list, discover and book accommodations.
- Quibi
- HQ: Los Angeles
- New Funding: $750 million private-equity round
- Total Venture Funding: $1.8 billion
- Quibi is a media company developing short-form media content designed for smartphones.
Find the full list of 2020 funding rounds in the Western U.S. here.
Northeastern U.S.
The Northeastern U.S. is the second-highest venture funded region in the U.S. in 2020, with $22.2 billion raised so far. Although this amount is much lower than that of the Western region, the Northeastern region still doubled the funding totals of the Southern U.S.
The majority of funding in the Northeast was driven by Massachusetts ($9.6 billion) and New York ($8.9 billion), which are both prominent and well-known health care and biotech hubs. Fittingly, health care and biotech received $10 billion, nearly half of the region’s total funding. Of the $10 billion, 60 percent that went to health care and biotech was invested in Massachusetts companies, including the largest round in the region that went to the Boston-based biotech company Indigo.
Here’s a look at the top five funding rounds in the Northeastern region of the U.S.:
- Indigo
- HQ: Boston
- New Funding: $535 million Series F (Jan. 6, 2020)
- Total Venture Funding: $1.1 billion
- Indigo uses natural microbiology and digital technologies to improve grower profitability, sustainability and consumer health.
- Toast
- HQ: Boston
- New Funding: $400 million Series F (Feb. 14, 2020)
- Total Venture Funding: $899 million
- Toast is an all-in-one point-of-sale and restaurant management platform for businesses in the food service and hospitality space.
- Sidewalk Infrastructure Partners
- HQ: New York
- New Funding: $400 million Series A (May 7, 2020)
- Total Venture Funding: $400 million
- Sidewalk Infrastructure Partners applies innovative technology to urban infrastructure systems.
- Everest Medicines
- HQ: New York
- New Funding: $310 million Series C (June 3, 2020)
- Total Venture Funding: $310 million
- Everest Medicines is dedicated to its mission of developing and commercializing novel transformative pharmaceutical therapies for patients.
- ClassPass
- HQ: New York
- New Funding: $285 million Series E (Jan. 8, 2020)
- Total Venture Funding: $549 million
- ClassPass is a membership program for fitness classes across multiple gyms and studios, making working out more accessible.
Find the full list of 2020 funding rounds in the Northeastern U.S. here.
Southern U.S.
The Southern U.S. comes in third place with $10.1 billion in venture funding raised in 2020 thus far. But the region is not to be overlooked–it’s also recorded 21 rounds of over $100 million just this year.
Financial services is a rising industry in the Southern region, representing two of the top five largest rounds in 2020; Bakkt and AvidXchange raised impressive $300 million and $260 million rounds, respectively.
Here’s a look at the top five venture funding rounds in the Southern U.S. so far this year:
- Epic Games
- HQ: Cary, North Carolina
- New Funding: $1.5 billion venture round (Aug. 6, 2020)
- Total Venture Funding: $3.4 billion
- Epic Games is an American video game and software company that creates games and offers its game engine technology to other developers.
- Magic Leap
- HQ: Plantation, Florida
- New Funding: $350 million venture round (May 21, 2020)
- Total Venture Funding: $3 billion
- Magic Leap is a proprietary wearable technology that enables users to interact with digital devices in a completely visually cinematic way.
- Fanatics
- HQ: Jacksonville, Florida
- New Funding: $350 million Series E (Aug. 13, 2020)
- Total Venture Funding: $2 billion
- Fanatics designs, manufactures and distributes high-quality fan gear and jerseys across retail channels.
- Bakkt
- HQ: Atlanta
- New Funding: $300 million Series B (March 16, 2020)
- Total Venture Funding: $483 million
- Bakkt is a financial services company that focuses on digital currency specializing in concurrency, rewards and loyalty points.
- AvidXchange
- HQ: Charlotte, North Carolina
- New Funding: $260 million Series F (Jan. 10, 2020). Also closed additional $128 million in April.
- Total Venture Funding: $1.1 billion
- AvidXchange is the industry leader in automating invoice and payment processes for mid-market businesses.
Find the full list of 2020 funding rounds in the Southern U.S. here.
Midwestern U.S.
The Midwestern region raised $5.2 billion total venture funding in 2020, the lowest amount of venture funding of all four U.S. regions. The region has also only recorded four deals of $100 million or more so far this year.
Although the Midwestern U.S. is the least funded region in the U.S., the funding that did happen wasn’t as concentrated in one area as was funding in others, such as the Western and Northeastern regions. Despite four of the five largest funding rounds going to companies in Chicago, that city only accounted for 25 percent of venture funding in the region. This indicates a wider geographic spread of company growth versus concentrated funding hot spots.
Here’s a look at the top five funding rounds in the Midwestern U.S. so far in 2020:
- Rivian
- HQ: Plymouth, Michigan
- New Funding: $2.5 billion private-equity round (July 10, 2020)
- Total Venture Funding: $5.4 billion
- Rivian is an electric vehicle manufacturer that develops products and services to advance the shift to sustainable mobility.
- VillageMD
- HQ: Chicago
- New Funding: $275 million corporate round (July 8, 2020)
- Total Venture Funding: $491 million
- VillageMD is a provider of data-driven services for primary care physicians.
- Tempus
- HQ: Chicago
- New Funding: $100 million Series G (March 13, 2020)
- Total Venture Funding: $620 million
- Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in health care.
- ActiveCampaign
- HQ: Chicago
- New Funding: $100 million Series B (Jan. 28, 2020)
- Total Venture Funding: $120 million
- ActiveCampaign is the Customer Experience Automation (CXA) category leader.
- Nature’s Fynd
- HQ: Chicago
- New Funding: $80 million Series B (March 24, 2020)
- Total Venture Funding: $113 million
- Nature’s Fynd is a food company producing a protein from a microbe discovered in the geothermal springs.
Find the full list of 2020 funding rounds in the Midwestern region here.
The West Continues to Power U.S. Venture Funding
Overall, the first six months of global venture funding in 2020 saw only a 6 percent decrease when compared to the first six months of 2019. Although still significant, this decrease does not reflect the grim predictions made at the start of the year when considering the economic impact of COVID-19.
The U.S. alone made up nearly all of North America’s funding (97 percent), which in turn made up nearly half of all global venture funding. This indicates that the country remains a stronghold for venture funding and growth, and represents a prominent target for salespeople seeking new opportunities.
As we move into the latter half of the year, time will only tell if the Western region will continue to dominate U.S. venture funding by such a significant margin. However, the rise in remote and distributed workforces could drive a new wave of deals for up-and-coming industries and uncover new venture funding hot spots.
Methodology
Private equity rounds for non-venture backed companies are not included. Data is as of Sept 1, 2020.
For the purposes of this article, the following U.S. states fall under each of the four U.S. regions (as designated in the Crunchbase dataset).
Western U.S.
Nevada, Colorado, Oregon, Wyoming, Arizona, New Mexico, Montana, Alaska, Utah, California, Idaho, Washington and Hawaii
Northeastern U.S.
New York, Massachusetts, Vermont, Pennsylvania, Connecticut, New Jersey, Rhode Island, Maine and New Hampshire
Southern U.S.
Oklahoma, Virginia, Tennessee, Mississippi, Delaware, D.C., Kentucky, Alabama, West Virginia, Georgia, North Carolina, South Carolina, Texas, Maryland, Louisiana, Arkansas and Florida
Midwestern U.S.
Indiana, Kansas, Iowa, Ohio, South Dakota, Minnesota, Missouri, Wisconsin, Nebraska, Illinois, Michigan and North Dakota
