In the Q1 of 2015, for the first time New York edged out California in total number of startup funding applications. Quarterly data from Gust, the online platform for the professional angel investment industry, shows that Silicon Alley had a 22% increase in funding applications for the first quarter of 2015, propelling the rapidly growing startup hub past its long-reigning Silicon Valley counterpart. Elsewhere in the startup and angel investor ecosystem, the total volume of funding applications across the globe jumped nearly 7% over Q4 of 2014.
New York’s early stage industry owes its growth to a combination of economic dynamics and a string of fruitful public-private partnerships driven at the state and local level. As technology continues its rapid advance into every facet of every industry, New York has leveraged its traditional role as the world capital of business into becoming an emerging center of so-called “hyphen tech.” Along with its traditional Fin-tech (financial) and Ad-tech (advertising) industries, the recent emergence of fashion-tech, food-tech, retail-tech and the emerging ‘maker’ market have made New York a destination for entrepreneurial startups.
Last year, New York’s Governor Andrew Cuomo launched an ambitious Start-Up New York program that provided 100% tax breaks for new startups all across the state, including a 100% tax rebate for the income tax paid by new startup employees. In New York City, Mayor Bill de Blasio launched Digital.NYC in partnership with IBM, a comprehensive online hub for the City’s startup and technology ecosystem that brings together every company, startup, investor, event, job, class, blog, video, workspace, accelerator, incubator, resource and organization in New York’s tech sector.
California and New York jointly account for a larger percentage of total funding applications in the US market over Q4 2014, pointing towards strong overall growth on the coasts. Elsewhere in the United States, Florida remains a strong contender in the tech startup arena despite a decline in the state’s share of funding applications during the quarter. New Jersey, led by a growing startup center in Hoboken and Jersey City, also broke into the ranks of the top ten states with the most funding application requests.
On the global level, the United States remained #1 with a 5% increase in funding application share over Q4 2014. In a show of continued activity, India, whose startup industry has been growing steadily at least since Q3 2014, broke into the #2 spot replacing France. Israel and Finland also saw considerable gains over Q4 levels, moving them into the Top 10 at the #6 and #10 spots, respectively. Internet Web Services and Consumer Product & Services remained the two most popular industries for funding application requests across the globe. Startups with market-ready products and those in the development stage continued to lead with the most funding application requests. However, startups in the “Idea Stage” saw a 13% increase in funding requests, a trend carrying over from the previous two quarters.
Entrepreneurship continues to grow both in the United States and abroad. The persistence of entrepreneurs coupled with new investments in infrastructure supporting startups is helping shape where and how technology growth is occurring. New York’s movement toward parity with California is an example of how smart public investment can help technology move into traditional industries, and is potentially a harbinger of other traditional business centers leveraging their historic resources into a technology-enabled future.
