Global Tech

Hubs Report

Global metro areas and their tech companies

1
Contents

3 Who Made the Cut? 25 High Growth Hubs

4 Our Tech Hubs: 25 Metro Areas 33 Up and Comers

5 Executive Summary 42 The Rise of Asia

7 2018 Tech Hubs Compared 49 The Exit Strategy

12 Who’s Up, Who’s Down? 53 Tech Hubs That Didn’t Make It This Year

15 Defining Our Tech Hubs 55 Methodology

17 Heavyweight Hubs

2
Who made the cut?

3
 OUR TECH HUBS

25 Metro Areas
AMSTERDAM LONDON STOCKHOLM
AUSTIN MUMBAI SILICON VALLEY
BENGALURU NEW DELHI SYDNEY
BARCELONA NEW YORK TEL AVIV
BEIJING PARIS TOKYO
BERLIN SÃO PAULO TORONTO
BOSTON SEATTLE VANCOUVER
DENVER SEOUL
LOS ANGELES SHANGHAI

4
EXECUTIVE SUMMARY

What We Found
1 2 3
SILICON VALLEY BUT BEIJING AND EXITS RETURN
STILL OFF THE SHANGHAI ARE $$$ TO
CHARTS CATCHING UP CALIFORNIA,
LONDON,
Since 2012, Silicon Valley- Beijing and Shanghai are
BEIJING
based tech companies poised to be the tech hubs of
brought in a total of 12K the future. They lead among Globally, Silicon Valley saw
deals, followed by New York- high-growth hubs for 4x more $100M+ exits than
area based companies with unicorns, mega-rounds, and the next hub, NY. Hubs with
5K. For funding, Silicon large exits. Company the most large exit counts
Valley companies brought in creation is accelerating. also included London, LA,
a total of $140B with Beijing and Beijing.
next coming in at $75B.

Refer to Report Methodology on Slide 55. 5

EXECUTIVE SUMMARY
What We Found
4 5
SOFTBANK: KEY
IN ASIA’S RISE
The Japanese tech holding
company’s portfolio includes
more than 65 companies in
our Asian hubs, showing how
a single investor has
propelled the rise of tech in
Asia, particularly China and
South Korea.
Refer to Report Methodology on Slide 55.
TEL AVIV
IS THE MOST
INTERNATIONAL
More than 2/3 of funding
deals to startups in Tel Aviv
involve foreign investors.
Other emerging hubs like
São Paulo also benefit from
a high percentage of
international investors.
6
SHANGHAI AND
BEIJING SEE
MEGA-EXITS
Outsized returns help
funnel new capital into an
ecosystem, as investors
don’t want to miss out on
the next big exit.
JD.com and Alibaba were
among the largest exits
globally in the period
studied and will fuel more
resources and talent.
6
2018 Tech Hubs
Compared

7
2018 TECH HUBS COMPARED

Beijing- and Shanghai-based tech companies

take on Silicon Valley
CUMULATIVE DOLLARS TO HUBS
JAN 2012 – MAY 20, 2018

Beijing and Shanghai are ramping up to

compete with Silicon Valley fundraising
$140B levels, buoyed by large rounds to hot
startups like Didi, Toutiao, Mobike and
Ele.me.

$72B

$36B
$23B

Silicon Valley Beijing NY Shanghai

8
12000
2018 TECH HUBS COMPARED

Silicon Valley still plays a dominant role

10000
Since 2012, Silicon Valley metro area companies saw 12K deals spread out amongst
7K unique companies — more deals to tech than all non-US metro hubs combined.
8000
12000 Full scale

See full scale at right 12000

Silicon Valley
6000 12,337 deals
10000

12127 8000
4000
New York
6000 5,252 deals
London
LA
2000 4000 2,982
2,659
deals
deals
2000
0
0

*Jan 2012 – May 20, 2018 9

2018 TECH HUBS COMPARED

Beijing and Shanghai ramp up with high unicorn

60

numbers
50

TECH UNICORNS BY METRO REGION AS OF MAY 20, 2018 Full scale

40 60
60
Silicon Valley
See full scale at right 57 unicorns
50
30
40
Beijing
20 29 unicorns
30

20 New York
10 13 unicorns
10

0 0
Shanghai
11 unicorns

Values are for tech unicorns only; No tech unicorns: Austin, Tokyo, Mumbai, Toronto, Denver, Vancouver, Barcelona, Tel Aviv, Sydney 10
UNICORNS BY METRO REGION

Beijing and Shanghai unicorn creation has lately

been hot on the heels of Silicon Valley
TECH UNICORNS BORN IN Q1 2018

Values are for tech unicorns only; No Tech unicorns: Austin, Tokyo, Mumbai, Toronto, Denver, Vancouver, Barcelona, Tel Aviv, Sydney. 11
Who’s Up?
Who’s Down?

12
WHO’S UP? WHO’S DOWN?

Investment growing outside of California

PERCENT CHANGE IN FUNDING TO STARTUPS 2014–2015 VS 2016–2017

Key

GROWTH
DECLINE

13
WHO’S UP? WHO’S DOWN

Stockholm stands out for high deals growth

PERCENT CHANGE IN DEALS TO STARTUPS 2014–2015 VS 2016–2017

Key

GROWTH
DECLINE

14
BREAKDOWNS

Defining The Tech Hubs

15
DEFINING OUR TECH HUBS

16
DEEP DIVE

Heavyweight Hubs

17
BREAKDOWNS: DEFINING OUR TECH HUBS

Heavyweight hubs
670 $38B
Average deal count Average dollar amount raised
2012 – 2017 2012 – 2017

CHARACTERISTICS

Lower/stable growth rates

Fewer new companies entering the market
Higher concentration of later stage rounds
High density of engineering hiring
Higher rates of follow-on deals to startups

18
DEEP DIVE: HEAVYWEIGHT HUBS

Deals plateau for these traditional hubs

EQUITY DEALS 2012 – 2017

2500

2000
Silicon Valley

1500

1000
New York
London
500 Los Angeles
Boston
Tel Aviv
0
2012 2013 2014 2015 2016 2017

19
DEEP DIVE: HEAVYWEIGHT HUBS

Tel Aviv has large exits with little previous funding

BETWEEN THE YEARS OF 2012 – 2017
20%
Tel Aviv has fewer exits than many hubs,
PERCENTAGE SHARE OF TOTAL

but 14% of all exits in the city are valued

EXITS VALUED OVER $100M

16% above $100M.

TEL AVIV Silicon Valley has well over 200 exits at

12% the $100M+ level. Large exits are the best
indicator of a healthy tech ecosystem.
LONDON
8% SILICON VALLEY
NEW YORK
BOSTON
LOS ANGELES
4%

0%
0 100 200 300
COUNT OF EXITS VALUED OVER $100M

Bubble size indicates aggregate total funding of companies at exit. First exits only. 20
 DEEP DIVE: HEAVYWEIGHT HUBS

Tel Aviv attracts a lot of foreign investors

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
foreign investors no foreign investors

100% Tel Aviv attracts a high

number of US- and Europe-
based investors, leading to
75% a high proportion of foreign
investor-backed deals.

50%

25%

0%
Tel Aviv London Silicon New York Boston Los Angeles
Valley
21
 DEEP DIVE: HEAVYWEIGHT HUBS

Corporate investors favor Tel Aviv

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
corporate investors* no corporate investors

100% Known for its cybersecurity

and enterprise software
companies, Tel Aviv is not
75% surprisingly a standout for
corporate investors.

50%

25%

0%
Tel Aviv Silicon Boston New York Los Angeles London
Valley
*Corporate investors include corporate venture capital arms. 22
DEEP DIVE: HEAVYWEIGHT HUBS

Notable companies

UBER INFOR SPACEX DELIVEROO

HEADQUARTERS San Francisco New York City El Segundo (LA Metro) London

TOTAL RAISED* $15B $2.6B $1635M $958M

VALUATION $68B $10B $18.5B $2B

SoftBank Group,
RECENT INVESTOR(S) Koch Industries Founders Fund Accel, DST Global
Sequoia Capital

Mobile → Travel Internet → Finance Internet → Food

CATEGORY Industrial → Robotics
App Management Delivery
MOSAIC SCORE
940 790 860 890

*Total raised reflects the total equity amount raised by companies. 23

 DEEP DIVE: HEAVYWEIGHT HUBS

Silicon Valley shows strength in mega-rounds

ROUNDS GREATER THAN $100M SINCE 2014

160
158
140
120
100
80
60
40
40 19
20 30 13
2
0
Silicon Valley New York Los Angeles London Boston Tel Aviv

24
DEEP DIVE

High Growth Hubs

25
BREAKDOWNS: DEFINING OUR TECH HUBS

High growth hubs

171 $14B
Average deal count Average dollar amount raised
2012 – 2017 2012 – 2017

CHARACTERISTICS

Higher frequency of early startups entering the market

Higher dollar investment and deal count growth rates
Higher concentration of early-stage companies
High rates corporate-backed deal-making in Asia

26
DEEP DIVE: HIGH GROWTH HUBS

Beijing and Shanghai see growth skyrocket

EQUITY DEALS TO PRIVATE TECH COMPANIES 2012 – 2017

600
Beijing
500

400
Shanghai
Paris
300
Seattle
200 Bengaluru
Tokyo

100

0
2012 2013 2014 2015 2016 2017

27
DEEP DIVE: HIGH GROWTH HUBS

Beijing and Shanghai lead on exits

BETWEEN THE YEARS OF 2012 – 2017

30% Not surprisingly, Beijing and Shanghai

tech companies tend to raise a lot of
money and end up highly valued at exit.
PERCENTAGE SHARE OF TOTAL

25%
EXITS VALUED OVER $100M

SHANGHAI BEIJING Since 2012, Beijing has seen over 30

large exits, with JD.com, the logistics
20% tech giant, seeing an IPO valued at
about $26B.
15% Shanghai is clocking in at nearly
20 exits valued over $100M.
10% TOKYO The size of the bubbles show aggregate
BERLIN TORONTO amounts raised before exit for tech
companies in each metro. Beijing
5% PARIS SEATTLE
and Shanghai also dominate there.
NEW DELHI AUSTIN
BENGALURU
0%
0 10 20 30 40
COUNT OF EXITS VALUED OVER $100M
Bubble size indicates total funding before exit. First exits only. 28
 DEEP DIVE: HIGH GROWTH HUBS

Berlin sees a lot of foreign investors

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
foreign investors no foreign investors

100% US hubs like Austin and

Seattle see relatively
little foreign investor
75%
participation showing
how US tech hubs tend
50% to be less cosmopolitan
in investor terms

25%

0%

29
 DEEP DIVE: HIGH GROWTH HUBS

Tokyo and corporates, a love story

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
corporate investors* no corporate investors

100% Tokyo’s tech market

sees prolific investment
from corporate investors
75% including Toyota and
Hitachi.
50%

25%

0%

*Corporate investors include corporate venture capital arms. 30

DEEP DIVE: HIGH GROWTH HUBS

Notable companies

lU.COM DIDI BLABLACAR OLACABS

HEADQUARTERS Shanghai Beijing Paris Bengaluru

TOTAL RAISED* $1.7B $15B $335M $3.6B

VALUATION $18.5B $56B $1.6B $3.7B

Ping An Ventures, Baring Vostok Capital SoftBank Group,

RECENT INVESTOR(S) SoftBank Group
Bank of China Partners Tencent Holdings

CATEGORY Internet → Lending Mobile → Travel Mobile → Travel Mobile → Travel

MOSAIC SCORE
730 850 760 860

*Total raised reflects the total equity amount raised by companies. 31

DEEP DIVE: HIGH GROWTH HUBS

Beijing and Shanghai dominate in mega-rounds

ROUNDS GREATER THAN $100M SINCE 2014

128

58

21 11
18 5 4 4 1

Beijing Shanghai Bengaluru New Delhi Berlin Paris Austin Seattle Tokyo

32
DEEP DIVE

Up and Comers

33
BREAKDOWNS: DEFINING OUR TECH HUBS

Up and comers
75 $2.5B
Average deal count Average deal amount
2012 – 2017 2012 – 2017

CHARACTERISTICS

Lower deal counts than other hubs

Lower dollar investment
High percentage of first-time funding rounds
High foreign investment rates

34
DEEP DIVE: UP AND COMERS

Seoul and Stockholm emerge from the pack

EQUITY TECH DEALS 2012 – 2017

300
Stockholm
250
Seoul
200

150 Mumbai

100 São Paulo

Sydney
Vancouver
50

0
2012 2013 2014 2015 2016 2017

35
DEEP DIVE: UP AND COMERS

Sydney’s tech exits propped up

BETWEEN THE YEARS OF 2012 – 2017
10%
Bolstered by Atlassian’s IPO in 2014 at
$1.1B and Freelancer.com’s IPO at $1B,
PERCENTAGE SHARE OF TOTAL
EXITS VALUED OVER $100M

Sydney, Australia-based tech companies

8% have seen a relatively high percentage
SYDNEY of valuable exits.
MUMBAI DENVER
6% The Denver and Stockholm areas have
seen the most exits of $100M+ or more.
BARCELONA SÃO PAULO
Stockholm clearly leads in aggregate
4% SEOUL AMSTERDAM funding raised by startups before exit.
VANCOUVER STOCKHOLM

2%

0%
0 2 4 6 8 10
COUNT OF EXITS VALUED OVER $100M
Bubble size indicates total funding raised before exit. First exits only. 36
 DEEP DIVE: UP AND COMERS

Stockholm and São Paulo draw foreigners

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
foreign investors no foreign investors

100%
Again, a US tech hub
stands out for less
75% foreign investor
participation.

50%

25%

0%

37
 DEEP DIVE: UP AND COMERS

Asian hubs tend to see more corporate activity

FUNDING ROUNDS 2012 – 2017
percent of rounds with percent of rounds with
corporate investors* no corporate investors

100% Seoul’s game development

companies have seen notable
interest from corporates
75% including China-based
Tencent and Line Corp.

50%

25%

0%

*Corporate investors include corporate venture capital arms. 38

DEEP DIVE: UP AND COMERS

Notable companies

COUPANG KLARNA LETGO SCYTL

Naarden
HEADQUARTERS Seoul Stockholm Barcelona
(Amsterdam Metro)
TOTAL RAISED* $1.8B $334M $475M $127M

VALUATION $5B $2.5B $1B N/A

Adams Street
Fidelity Investments,
RECENT INVESTOR(S) Visa, Permira NEA, Accel Partners, Sapphire
BlackRock
Ventures
Online → Online → Government
CATEGORY Online → Coupons Online → Payments
Ecommerce/Chat Management

MOSAIC SCORE 780 910 740 620

*Total equity raised by company 39
DEEP DIVE: UP AND COMERS

Amsterdam and São Paulo draw mega-rounds

ROUNDS GREATER THAN $100M SINCE 2014

8 8
7

1 1 1 1

Amsterdam Sao Paolo Seoul Mumbai Barcelona Sydney Denver Stockholm

40
DEEP DIVE: UP AND COMERS

Spotlight on Stockholm
Home to Spotify, one of the largest IPOs in 2018, and iZettle, acquired by PayPal for
$2B, Stockholm is a high-ranking up and comer.

$4B
Total raised
648
Total deals
34%
Increase in first time Current
since 2012 since 2012 funding rounds unicorn
(2016 vs 2017)

TOP 5 INVESTORS

41
DEEP DIVE

The Rise of Asia

The rise of confident tech hubs
including those in China and India but
also South Korea and Japan are an
expression of Asia’s growing
influence in the technology sector.

42
DEEP DIVE: RISE OF ASIA

First deals to startups growing across region

Company creation in the region is accelerating, shown by first
financing trends.
COUNT OF FIRST-TIME FUNDING ROUNDS TO UNIQUE COMPANIES
300
Beijing
250

200
Shanghai
150
Tokyo
100
Seoul
50

0
2012 2013 2014 2015 2016 2017

43
DEEP DIVE: RISE OF ASIA

Shanghai and Beijing dominate list of big exits

ELE.ME QUDIAN PPDAI GROUP MOBIKE

HEADQUARTERS Shanghai Beijing Shanghai Shanghai

EXIT TYPE M&A by Alibaba IPO IPO M&A

EXIT VALUE $9.5B $7.9B $3.9B $3.7B
Ant Financial, BlueRun Alibaba Group, Sequoia Sequoia Capital,
PREVIOUS Sequoia Capital, Ant
INVESTOR(S)
Ventures, Kunlun Capital, Lightspeed China Qualcomm Ventures,
Financial, Didi
Worldwide Partners Panda Capital
Online → Grocery
CATEGORY Online → Lending Online → Lending Mobile → Travel
Delivery

44
DEEP DIVE: RISE OF ASIA

Beijing sees the most unicorn births

Since 2012, Beijing has seen a total of 29 unicorn births, two
of which exited.
UNICORNS BORN IN HUBS SINCE 2012

12
Beijing
10
Shanghai
8 New Delhi

6 Bangalore
Seoul
4 Tokyo
2

0
2012 2013 2014 2015 2016 2017 2018

*Births 2012 – June 1, 2018 45

DEEP DIVE: RISE OF ASIA

Top tech unicorns within Asian tech hubs

Beijing comes in with the most, at 29 total tech unicorns.

Pinduoduo

+26 more +8 more +2 more

companies companies companies

*Current unicorns as of June 1, 2018 46

DEEP DIVE: RISE OF ASIA

Top five most highly valued tech unicorns

DIDI CHUXING XIAOMI CHINA INTERNET BYTEDANCE LU.COM

PLUS dba Toutiao

HEADQUARTERS Beijing Beijing Beijing Beijing Shanghai

VALUATION $18.5B
as of most recent $56B $46B $30B $20B
funding date

YEAR ENTERED 2014 2011 2015 2017 2014

Mobile → Ride Electronics → Online → Mobile → Content Online → Lending

CATEGORY
Hailing Smartphone Ecommerce Aggregator

MOSAIC SCORE 730

870 890 620 730

47
DEEP DIVE: RISE OF ASIA

SoftBank’s investments span all of Asia

The Japanese telecom giant and tech holding company
favors South Korea and China.

+20 more +11 more +11 more +4 more +1 more

companies companies companies companies company

Data includes all of Softbank’s Affiliates. Funding values since 2012 – June 1, 2018. 48
DEEP DIVE

The Exit Strategy

49
 THE EXIT STRATEGY

“Without big exits, the ecosystem is

like a roach motel, money can come
in, but it doesn’t get out. And that’s not
a good thing for anyone”
— Lou Kerner, Partner at CryptoOracle.io

50
DEEP DIVE: EXIT STRATEGY

In exits, traditional hubs show their strength

TECH EXITS (M&A/IPO) VALUED OVER $100M
2012 – 2018 (APRIL 8, 2018)

252 61 49 43 34
EXITS EXITS EXITS EXITS EXITS

23 19 19 17 13
EXITS EXITS EXITS EXITS EXITS

51
DEEP DIVE: EXIT STRATEGY

Largest tech exits across all hubs

FACEBOOK SPOTIFY JD.COM SNAP

Venice Beach (LA
HEADQUARTERS San Francisco Stockholm Beijing
Metro)
EXIT TYPE IPO IPO IPO IPO

EXIT VALUE $104B $29.4B $25.7B $24.8B

Accel, DST Global,

PREVIOUS Horizons Ventures, Sequoia Capital China, Benchmark, KKR, New
INVESTOR(S)
Technology Crossover
Microsoft Tencent Holdings Enterprise Associates
Ventures

Internet → Social Internet → Social

CATEGORY Internet → Music Internet → eCommerce
Media Media

Exits are for the years 2012 – 2018 (May 20, 2018). 52
LOOKING FORWARD

Tech Hubs That Didn’t

Make It This Year

53
LOOKING FORWARD

Metros with high potential for the future

CITY NOTABLE ACTIVITY

Chicago Total of 4 tech unicorns in the region with a 5th born

in Q1’18 – Tempus Labs, a biotechnology company.
Shenzhen Total of 5 tech unicorns with 15 rounds at $100M+
between 2014 and 2017.
Singapore 23% deal growth and 178% funding growth between 2016
and 2017. Two billion-dollar exits in 2016 and 2017.
Hangzhou High number of new startups getting funding and home of
Alibaba headquarters.
Montreal Little tech activity, but home to McGill University (a top tech
school)
DC 168% increase in deal activity between 2016 and 2017.
Home to the Carlyle Group.

54
INDEX

Methodology

55
INDEX

Methodology
We used the CB Insights platform to aggregate data around funding and exit events for
startups around the world. The 25 top tech hubs were chosen based on a deal share basis of
the global total. To diversify our selection geographically, we limited the US hubs to 7.

TECH DEFINITION METROS BREAKDOWN CLASSIFICATION OF

Companies that operate within Internet,
Mobile, Software, Computer Hardware,
Telecom, Electronics, and Robotics were
included in the report. Note that healthcare
companies, including those operating within
the Medical Device sector, were not
included.
ROUNDS
Metro hubs were chosen on a 30-50 mile
radius from city center. Companies were Equity rounds, first time exits only.
mapped to the respective region based on
Funding includes rounds to companies
city/state and city/country matching.
that are considered to be standalone or
Breakdowns of tech hubs into three
not acquired
categories was based on similar deal
count to ensure comparison of metros Note: For this report a “startup” is a
against similar markets. private tech company.

56
WHERE IS ALL THIS DATA FROM?

The CB Insights platform has the

underlying data included in this report

CLICK HERE TO SIGN UP FOR FREE

57
cbinsights.com
@cbinsights

58