Aug 26, 2018

Boston Startups Are Booming

Substantial changes are happening in the world of venture investments. For example, according to some experts, Silicon Valley may not hold its title for long as the world’s top hub for startups. Beijing, which has established itself as China’s technology capitol, is apparently nipping at its heels.

“Since 2012, Silicon Valley-based tech companies brought in a total of 12,000 deals, followed by New York area-based companies with 5,000,” says one report. “For funding, Silicon Valley companies brought in a total of $140 billion, with Beijing next, coming in at $75 billion.”

While these international tech giants duke it out for bragging rights, a long-time tech haven in the northeastern United States has regained its place as the second-largest startup funding location in the country. Boston has seen more than $5 billion in venture investments this year, moving the city above its chief competitor, New York City. In fact, fueled by a talented army of entrepreneurs, Boston has actually attracted about 15% more investments than the Big Apple.

Much of the cash pouring into Boston has been focused on biotech, which is a staple of the New England city. This is partly due to the presence of MIT, which has a reputation for developing innovative deep tech (complex technology that addresses sophisticated problems).

“Boston often gets dismissed as a has-been startup city,” Blake Bartlett, a partner at Boston-based venture firm OpenView, said in an interview. “But the successes are often overlooked and don’t get the same attention as less successful, but more hypey companies in San Francisco.”

Aside from biotech, other Boston staples include enterprise software, AI, consumer apps, enterprise software, and 3D printing. The city’s largest funding recipient this year has been Moderna Therapeutics, which develops mRNA-based drugs. The company was able to raise an impressive $625 million.

Ultimately, the secret sauce for Boston’s ascension in the venture investment rankings has been an increase of supergiant funding rounds. Thus far in 2018, about 15 Massachusetts companies have experienced rounds of at least $100 million. That number is even more impressive when you consider that in all of 2017, only a dozen companies accomplished the same feat.

As one might expect, there’s a corresponding wave of Boston startup companies going up for sale. And the prices have been nothing short of impressive. This year, seven startups have been sold for at least $100 million. At the top of this list is PillPack, which Amazon bought for $1 billion.

With these strong tailwinds provided by innovative technology and a seemingly inexhaustible lineup of perky startups, it looks like Boston will continue to be an entrepreneurial hub for years to come.

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About the author

Grant Olsen
Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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