Editor’s note: This is a repost of a TechCrunch article written by Jon Shieber.
For New York City’s startup community, the future venture capitalists have hoped for may be taking place right now.
Over the past two days New York startups have announced nearly $200 million in funding, so the question may not be “When will New York be a venture hub in its own right?” but instead “How soon is now?”
The city is already on pace for the best first quarter in its history – with 98 companies raising nearly $1.3 billion to date and its second best quarter by capital committed since 2009, according to our data. In the last quarter of 2013 New York’s new companies raised over $1.6 billion.
Increasingly investors from the West Coast are making the trek back East to look at deals in the Big Apple.
“We traditionally had the bulk of our investment in the Bay Area and Boston was the number two [geography] for us,” said Menlo Ventures managing director John Jarve, who sits on the board of the New York-based financial services company Betterment. “[Now] I keep telling my partners we should open a New York office. This is here to stay.”
The round that Khosla Ventures led for Canary is indicative of increasing competition from West Coast VCs for New York deals, according to an investor familiar with the company’s negotiations. “We got priced out and sized out,” one New York investor said.
Buoying investors’ faith in the long-term viability of New York as a new venture hub, rather than seeing the current climate as a New York bubble, is the breadth of companies that are being launched.
“I can’t think of a day where we had this much activity and this size of investment. And diversity,” said David Aronoff, a general partner with the New York and Boston-based early stage investment firm Flybridge Capital Partners. “There was a hardware product, a financial technology company, a media company and in TripleLift you’ve got something in adtech marketing that is a business to business sale.”