Central Florida startups are getting the attention of investors in two of the technology world’s most powerful regions.
Orlando is among the top 20 U.S. metros where companies are landing the most seed capital and early-stage venture capital investment from firms based in the San Francisco Bay Area and New York City, according to a new report from seed fund Rise of the Rest. Orlando is No. 18 among cities receiving investment from San Francisco Bay Area firms, with $435 million since 2011. Orlando ranks 19th when it comes to investment by New York firms, with $382 million in the last decade.
Orlando’s appearance on the list is a sign that local startups are attracting investors in two of the nation’s biggest technology and investment hubs. That’s important because venture capital can help early-stage companies scale, creating high-wage jobs and innovative solutions for other businesses.
This year, many of the region’s biggest venture capital deals included money from firms in Silicon Valley. They include:
- Four San Francisco-based firms and one Santa Clara, California-based firm invested in Winter Garden-based Anuvia Plant Nutrients Corp.’s $103 million Series C round.
- Santa Clara, California-based Intel Corp.'s Intel Capital co-led a $23 million Series A round for Orlando-based autonomous shuttle firm Beep Inc.
- Menlo Park, California-based NextEquity Partners participated in Orlando-based Kore.ai Inc.’s $50 million Series C round.
It’s especially important that local companies attract out-of-state investors since Florida is not a top state for venture capital. For example, a November analysis by Crunchbase showed the Sunshine State ranks 18th in the country for venture capital funding per capita. Massachusetts, California and New York are the top three states, respectively.
Venture capital dollars are increasingly deployed outside of New York and the Bay Area, according to Rise of the Rest’s report, which used data from PitchBook. In fact, the proportion of early-stage venture capital going to Bay Area startups is on pace this year to fall below the 30% mark for the first time in more than a decade, according to the report.
The report closely studied a dozen emerging tech cities outside of established hubs like Boston, Chicago or Austin, Texas. It found a few common denominators, according to the report. “Tech talent has spread everywhere following Covid-19; livability is crucial; culture matters; local corporations are helping; sector expertise is increasingly important; and universities are initiating a new era of entrepreneurship education.”
An outflow of workers from Silicon Valley when remote work became widely adopted during the Covid-19 pandemic is forcing investors in that region to reconsider how they operate, Bill Catania, CEO of Orlando-based logistics tech startup OneRail, told Orlando Inno. OneRail’s most recent fundraising round was led by Austin, Texas-based Ironspring Ventures.
“If anything good came out of it, it was the fact that this holier-than-thou mindset the VC’s operate with in Silicon Valley was shattered.”
Meanwhile, the only other Florida metro to appear in either list in the Rise of the Rest report was Miami. The South Florida city raked in $1.9 billion from Bay Area investors from 2011-2021, ranking No. 10. In the same timeframe, Miami landed $2 billion from New York City firms, ranking ninth.
Sign up here for The Beat, Orlando Inno’s free newsletter. And be sure to follow us on LinkedIn, Facebook and Twitter.
