Business Startups Venture

Morning Report: The Decline Of SF Startup Investment

Morning Report: Everyone’s favorite red-charted venture capitalist charted some critical San Francisco startup numbers we need to observe.

Redpoint’s Tomasz Tunguz wrote a piece a few days ago that I missed, but it should be highlighted before we head into the weekend.

The current tech boom drove a surge in funding for San Francisco-based companies. That rising tide led to (what at least felt like) a rebalancing of tech’s center of gravity away from its traditional Silicon Valley home. San Francisco was the place to be, and companies flocked to it.

And funding rolled in. For a time, at least. It seems that the headiest days of the current boom, taking place around 2014 and 2015, were especially frothy in San Francisco.

Here’s Tunguz’s chart showing H1 funding intra-San Francisco going back to 2010:

Eyeballing with moderate confidence, funding has fallen by more than 50 percent in 2017 compared to 2014. The trend, however, is slowing somewhat on a percentage basis, when we compare the H1 2015 to H1 2016 decline, in contrast to the H1 2016 to H1 2017 decline.

None of this is to argue that things will swing back in favor of Silicon Valley (if that hasn’t happened already, of course; I have no take of import on the matter). But it does show that the currently recovering venture market isn’t lifting all boats.

From The Crunchbase Daily:

Klarna raises $225M for payments

  • Private equity firm Permira will pay $225 million for a stake of at least 10 percent in Klarna, the Stockholm-based online payments unicorn. Permira will buy shares from existing shareholders General Atlantic, DST and co-founder Niklas Adalberth.

Insurance is a hot space for VCs

  • Funding for insurance-focused startups has shot up dramatically in recent quarters, with a big chunk of investment coming from major insurers, a Crunchbase News analysis finds. In other news, we look at the massive growth spurt that preceded the latest Series A for loan startup Self Lender.

Shyp curtails service, cuts staff

  • On-demand shipping service Shyp announced in a blog post that it is withdrawing from all but one market, the San Francisco Bay Area, and cutting staff at headquarters in what it described as an effort to prove its business model for long-term success. Up till now, Shyp had also been operating in Los Angeles, Chicago and New York.

Betterment closes on $70M

  • Online financial adviser Betterment has raised has raised $70 million in a new Series E funding led by Kinnevik. The New York-based company has raised a total of $275 million to date.

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

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