New York City is known for many things—culture…finance…fashion. But now you can add technology to that list. Recently, the New York metro area replaced Boston--as the No. 2 technology hub in the nation, second only to Silicon Valley. During the second quarter, $624.2 million in venture capital funding flowed into the New York metro area, with more than $416 million targeted for 48 Internet-based companies, according to a report released by PricewaterhouseCoopers and the National Venture Capital Association. In all, a total of 98 companies in the area received venture capital funding.
"The current influx of venture capital (VC) money in New York City, has to be very encouraging for up and coming entrepreneurs in the area. It means that people can now focus on facilitating innovative and useful ideas along with great pitches for funding, without having to worry about how to ingratiate themselves into the tightly-wound cliques of Silicon Valley, way on the other side of the country," says social media expert Andreas T. Jackson.
Among the NYC tech firms to receive VC money were online luxury retailer Gilt Group. Gilt received $138 million in funding, which was the second highest amount in the nation. Social networking site Foursquare received $50 million and flash-sale site Ideeli received $41 million, according to the MoneyTree report. Most of the funding, $218.2 million, went to consumer product and service companies. Of this, $207 million went to five e-commerce companies. The second quarter wasn’t the only period when NYC attracted major VC dollars. This was actually the third consecutive quarter in which the area got more than $500 million in venture capital funding.
New York was also the place for tech deals to be made. According to CB Insights, a venture capital and angel investment database, New York had 54 deals amounting to $521 million.
The NYC government is looking to capitalize further on these recent developments. Mayor Michael Bloomberg recently announced that the government would provide up to $100 million to any institution that will build or expand a science and engineering campus in the city.
According to the mayor, such a facility would create 400 new companies and 22,000 permanent jobs during its first 35 years.
The NY metro area will continue to grow in the tech arena. "In my speculative opinion, New York aka Silicon Alley has done a very good job of fostering a confluence of organic, innovation-minded tech communities over the past few years. We've seen many diverse events and activities around the city from huge conferences like Web 2.0. to more ad hoc gatherings like Brand Camp, and a lot of smaller and very active meet-ups for business and emerging technologies," he says. "It doesn't hurt that leading tech giants including Google and Facebook have established headquarters in New York, and local-based entrepreneurs such as Dennis Crowley co-founder of Foursquare, have made a name for themselves in Silicon Valley perhaps adding to NYC's tech cachet. This likely attracts the attention of local VC funders who want in on the action."