Despite declines, 2019 was Silicon Valley’s second biggest year for investments – according to the recent MoneyTree report (Q4 2019) mainly focused on US investments, jointly released by PricewaterhouseCoopers and CB Insights. Companies based in Silicon Valley or in San Francisco received $47.2 billion in 1,722 deals last year, down from a record $61.0 billion and 1,987 deals in 2018. These figures only include equity financings into VC-backed private companies, which are defined by the report as companies that have received funding at any point from venture capital firms, corporate venture arms, or super angel investors. The Bay Area continues to absorb a large slice of tech investments, but the twenty-seven Silicon Valley-based or San Francisco-based companies that occupy top places in the report’s investment rankings – in categories such as the most valuable US unicorns, largest US deals, top IPOs, top funded companies, top mega-rounds etc. – are not directly related with chipmaking. Some of these companies are big and famous, other are probably not so well known outside their specific markets. Let’s take a quick look at them.
FinTech, real estate tech and more money-related platforms
FinTech (financial technology) and related online services is one of the areas where companies based in the Bay Area took center stage in 2019: among them Bill.com (Palo Alto), Ripple (San Francisco) and Stripe (San Francisco), three different types of online payment platforms. Also in the FinTech group are Chime (San Francisco), that can be described as an Internet banking company, and SoFi (San Francisco), an online loan platform. Real estate tech is another hot industry in the Bay Area; companies in the spotlight include Figure Technologies, HomeLight, Juniper Square, Qualia and Zeus, all based in San Francisco. Figure Technologies offers an online platform for home equity line of credit; HomeLight enables users to choose the best real estate agents in their areas; Juniper Square provides real estate investment management software; Qualia is an online platform for ‘real estate closing’; Zeus is a home rental platform. Also linked to real estate, of course, is Airbnb (San Francisco). To complete the category of money-related services, InsureTech (insurance technology) is another lively area with companies such as Next Insurance (Palo Alto), specializing in online insurances for small businesses.
Digital health, autonomous vehicles and other products
A completely different tech-based industry is digital health, where prominent Bay Area companies cited by the MoneyTree report Q4 2019 include ArsenalBio, GenapSys, Grail and Vir Biotechnology. Let’s take a quick look at them: ArsenalBio (South San Francisco) works on immune cell therapies; GenapSys (Redwood City) manufactures DNA sequencing equipment; Grail (Menlo Park) works on early cancer detection; Vir Biotechnology (San Francisco) is in the business of preventing serious infectious diseases. Moving to industries more closely related to computing, attracting investments in 2019 were Databricks (San Francisco) and Palantir (Palo Alto), active in data analytics and data management respectively; also cited in the report are cybersecurity company Shape Security (Santa Clara), recently acquired by Seattle-based F5; robotic process automation company Automation Anywhere (San Jose); and of course OpenAI (San Francisco). Autonomous vehicles obviously attracted investments in 2019, too, with companies such as Cruise (San Francisco), Nuro (Mountain View), specializing in delivery vehicles, and Zoox (Foster City). Completing the picture, three San Francisco-based companies from various industries: Flexport, an online platform for freight forwarding; Juul Labs, making electronic cigarettes; and Dolls Kill, an apparel e-commerce platform.
Cruise Origin. Image credit: Cruise
Another research from CB Insights, in association with The New York Times, has identified fifty future ‘unicorns’, that is, high-momentum startups likely to be eventually valued at $1B or more. The list obviously includes companies based in the San Francisco bay area, and EDACafe is planning to provide more details about them in the upcoming weeks.
Venture capital: Sand Hill Road still a hot spot
Bay Area venture capital firms played a key role in 2019 – considering all investment geographies, not just Silicon Valley tech companies. According to the MoneyTree report, Sequoia Capital and Andreessen Horowitz, both based in Menlo Park, ranked first and second with $7.4 billion and $6.5 billion of fund raised respectively. A third firm based in Menlo Park, New Enterprise Associates, leads the group of the most active VCs in 2019 with 87 deals. This ranking includes three more Bay Area VCs: Plug and Play Ventures (Sunnyvale), Founders Fund (San Francisco) and Google Ventures (Mountain View). Two more firms must be mentioned among the most active VCs when considering Q4 2019 deals alone: Accel (Palo Alto) and Lightspeed Venture Partners (Menlo Park). Famous Sand Hill Road, where most of the Menlo Park-based VCs are located, is still a hot spot for tech investments.
Upcoming events
Back to silicon, now, with some info on upcoming events. ISSCC (International Solid-State Circuits Conference) will take place from February 16th to 20th in San Francisco, while the Mobile World Congress (MWC) is scheduled for February 24th to 27th in Barcelona, Spain. Same week, February 25th to 27th, for the Embedded World show in Nuremberg, Germany. Next month – March 9th to 13th – the French city of Grenoble will host the DATE Conference; same week for the AI Hardware Summit Europe, taking place in Munich, Germany, on March 10th and 11th. Unfortunately, attendance to some of the events taking place over the next few weeks will probably be impacted by the Coronavirus fear and related air travel restrictions.
