Local venture capital firm North Bridge Ventures announced Wednesday that it will make the move from the ‘burbs of Waltham, Mass. into Boston proper. Because where the talent goes, the money will follow.
“Our leanings are toward the Innovation District or Downtown, mostly based on entrepreneurs saying it,” North Bridge investor Michael Skok told BetaBoston.
There’s no denying it: Tech companies are increasingly opting to settle down in Downtown Boston. Combine the high rents in Cambridge and the Innovation District with the flush of fresh co-working spaces downtown, and you have a perfect recipe for a new startup central. Plus, the late night T hours don’t hurt the cause, either.
Boston’s tech scene has witnessed a number of geographical shifts over the years: from Route 128 to Cambridge, from Cambridge to the South Boston’s Innovation District and now to the Downtown Boston area. And the venture capitalists seem to be the last to join the party.
First, startups, which have to pay extra special attention to their bottom line, started building their businesses in the neighborhood. Kendall Square was too crowded, the Seaport, too expensive, so Downtown Boston, and its easy access to the Red Line, made for the best-possible fit. Take, for example, Privy. After time at MassChallenge and out west at 500 Startups, the local marketing startup put up shop in 2013 on Lincoln Street, in the Leather District. Mobile payment company LevelUp, formerly in a compound on Congress Street, just opened a 25,000-square foot office at 101 Arch Street in early March, according to commercial real estate firm Jones Lang LaSalle. Visible Measures, Terrible Labs, Nexage and more are also found Downtown.
Then came the accelerators and co-working spaces. We got word last December that innovation-cultivating programs Techstars and the Cambridge Innovation Center were opening up spaces in the historically buttoned-up Financial District. NYC-spun co-working space company WeWork opened two buildings, one across from South Station, and the other in Fort Point. Another collaboration space called Coalition just opened last week in Downtown Crossing.
Now, it looks like some VCs are eyeing locations in the hot area. Early stage firm NextView Ventures, which is located in the same building as Techstars in the Leather District, is currently the only investment firm in the neighborhood. NextView moved to the area in 2011, because, as partner David Beisel told BostInno, the team “wanted to be where the seed stage entrepreneurs are.” And not simply because of the cheaper rent. Added Beisel:
Early stage startups are like the artists of the corporate world – yes, they're looking for inexpensive rent, but similarly they're also looking for work spaces and neighborhoods which have a cool vibe and are close to their peers.
In that case, the Leather District, and Downtown Boston in general, fits Beisel’s proposed profile. “We saw the early indications of the trend of entrepreneurs locating in Boston when we moved here three years ago … NextView is here because the startups are here, not the other way around," shared Beisel.
Three years later, and NextView has nine portfolio companies – over half of its Boston-based portfolio – within a 10-minute walk of its offices.
Other firms – Atlas Venture, Bessemer Venture Partners and Matrix Venture Partners, to name a few – have left the suburbs to open offices in Cambridge over the years. Flybridge and Spark Capital reside in the Back Bay. Most recently, Battery Ventures departed Waltham in December for the Seaport and Innovation District for a new spot on Fan Pier; Polaris Partners is joining them in the same building in early May.
If North Bridge does decide to pick Downtown Boston as its new location, the growing group of startups in the area – as well as the firm itself – stand to benefit. After all, North Bridge is trying to shake up their M.O. Fortune reported a month ago that the the firm's founders Ed Anderson and Rich D’Amore will no longer be general partners, shortly after rumors cropped up that the firm's younger investors were thinking of spinning off. With the generational transition and a new fund on the way, North Bridge's move into up-and-coming, innovation-rich Downtown Boston could serve to freshen up the 20-year-old firm.
Image via TVC
