Silicon Valley cities now “less of a shining star” in tech universe

Techies aren't totally abandoning the Bay Area anytime soon, though mass layoffs continue wreaking havoc on residents at an avg of 3,000/month (as compared to 2022's 871/month). While the Silicon Valley still takes the top spot nationwide in venture-capital investments, other cities like Miami, New York, and Austin are starting to catch up, as the SV relinquishes more market share (and residents). The Washington Post breaks it down here.

Silicon Valley has reigned for decades as America’s innovation capital, home to tech giants like Apple, Google and Facebook; unicorns like Uber, DoorDash and Instacart; and start-ups fueled by the venture capitalists that populate Sand Hill Road. But the region’s dominance has declined since the pandemic, as lenient remote work policies and a spate of layoffs have fueled the departures of workers and cleared the way for rising investment in other tech hubs across the United States, notably Austin and Miami.

Silicon Valley still ranked first last year in terms of venture-capital investments and the number of deals, according to data from PitchBook. But funding for companies in Miami has nearly quadrupled in the past three years, totaling $5.39 billion in 2022, while deal volume jumped 81 percent. Austin venture capital investments rose 77 percent to $4.95 billion with the number of deals jumping 23 percent. New York, Seattle, Philadelphia, Chicago, Denver and Houston also saw relatively large increases in investment and deals, data shows.

These regions still pale in comparison to Silicon Valley, which in 2022 drew $74.9 billion in investments across 3,206 deals. That’s about $45.36 billion and 1,058 deals more than New York, the second highest region for VC fundraising. The Silicon Valley region was also the home of 86 percent of start-ups, up from 53 percent last year, funded by famed start-up accelerator Y Combinator.

But Silicon Valley’s share of total value of venture capital investments in the United States last year was at its lowest since 2012. And nearly 250,000 people left the Silicon Valley region during the pandemic, according to census data from April 1, 2020, to July 1, 2022.

“There’s no doubt that [Silicon Valley’s] sort of exemplary, center-of-the-universe status has really absorbed some blows,” said Mark Muro, senior fellow at Brookings Institution.

This article originally appeared in the Washington Post. Read the whole thing here.

Read more on Silicon Valley’s tech death spiral here.

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