The National Venture Capital Association released third quarter national VC funding statistics a few days ago, and with them the organization broke down VC activity by major regions and states around the country. And for the first time in a while, things looked really, really (arguably) good for D.C.
In the third quarter of 2013, venture capital funding in the capital – or what NVCA defines as the D.C. metro area – was the most it's been since 2007, before the economy hit rock bottom. According to the data, "D.C./Metroplex" -region companies received nearly $446 million in funding between the beginning of July and the end of September – the most since the fourth quarter of 2007, when that number was $449 million. And in total, the region has cleared $1.1 billion already, putting this year's funding total at a not-so-distant reach to be the highest in 10 years (if it can beat out $1.4 billion in 2007).
However, the organization's geographical location is a bit skewed to group in other smaller hubs like Baltimore, West Virginia and Blacksburg, showing a growth that may be influenced by D.C.'s hub of innovation, but not necessarily reflective of the city's VC intake. For instance, when looking at it on a state-by-state level, D.C. received a meager $31.6 million on its own among just four VC deals. Data on Virginia, however, which takes into account Northern Virginian suburbs of D.C. that are rightfully considered part of the greater Washington area (but also the rest of the state), shows that 23 companies raised $273.6 million. Again, those in the Beltway region are inherently thought of as D.C. companies.
Additionally, thanks to two Northern Virginia companies' huge fundings, these numbers are massive. Specifically, $180 million of the D.C./Metroplex and Virginia totals come from Evolent Health and Clarabridge, who raised $100 million and $80 million respectively. Not only were these VC fundings a tremendous boost in the local region, but they also ranked as two of the top 10 deals around the country in the third quarter as the fourth and sixth biggest VC fundings. That's kind of a big deal.
All geographical arguments aside, when it comes to money, numbers don't lie. Comparing the D.C./Metroplex area to other major hubs, it ranks fifth-most funded in the country behind Silicon Valley, New England, New York Metro and Los Angeles/ Orange County. Before the second quarter of this year, D.C. metro often ranked lower than that. But what's more telling – or perhaps just an anomaly – is D.C.'s growth in funding between Q3 2012 an Q3 2013. Among those top five hubs, D.C. not only leads in growth change between the year-to-year third quarter data, but absolutely blows the competition out of the water with Q3 stats 106 percent higher compared to the same time last year. New York metro saw the next highest growth of 34 percent, while Silicon Valley (32 percent), L.A. (7 percent) and New England (four percent) trailed behind.
Let's hope those numbers are here to stay, not just a fluke. Sure, with a somewhat misleading geographic area and two big fish doing the heavy lifting, it's hard to confidently say those numbers will be reproduced. But there's also something special going on with innovation and disruption in and around the District, and these numbers are proof of that.
