Venture capital poured into New York City's ranks of growth businesses in the third quarter, even as funding declined elsewhere in the U.S.
The Big Apple took in $1.37 billion in venture money last quarter, up 22% from the second quarter and more than double the amount invested in the third quarter of 2013, according to data firm CB Insights.
The number of New York City companies receiving funding rose to 119 last quarter, up 14% from the second quarter and up 29% from a year earlier. The latest recipients of venture dollars included Vice Media, fantasy sports league operator FanDuel and men's clothing maker Bonobos.
By contrast, venture funding nationwide fell 30% to $9.79 billion in the third quarter from the second quarter's $13.89 billion, which had been the highest total since the tail end of the dot-com boom in 2001.
New York's surge in funding cemented its position as the second most popular U.S. regional destination for venture dollars, after California's Silicon Valley. Boston ranks third.
"It's not just the amount of venture money flowing to New York, but the breadth of opportunities VCs are finding here to fund," said Robin Gill, senior vice president for City National’s Technology Group in New York.
Brooklyn-based Vice Media, which has mushroomed from a Canadian magazine in 1994 to a global media player, took $250 million in growth-equity money last quarter from Technology Crossover Ventures. It was the quarter's biggest deal for a New York City firm. Also among the top-10 deals was a $50-million venture infusion for another fast-growing media entity,Buzzfeed.
The mainstream financial services business hasn't been a growth industry since the 2008 crash, but VC investors see an exception in new stock trading venue IEX Group. The New York firm, which got $75 million in Series C financing last quarter, has created a marketplace that it says protects investors from "predatory" traders such as computer-driven high-frequency trading operations. Next up, IEX plans to register as a stock exchange.
Among the more unusual venture beneficiaries last quarter was a Brooklyn firm known as Genius, formerly RapGenius. The online company, which got $40 million in venture funding, calls itself "the interactive guide to human culture." The basic idea: allow anyone to annotate any text, from song lyrics to the U.S. Constitution, to better explain the meaning.
EQUITY FINANCINGS FOR NEW YORK CITY VENTURE-BACKED COMPANIES*
|3 Q 2014||2 Q 2014||1 Q 2014||4 Q 2013||3 Q 2013|
|Number of Financing Deals||119||104||93||96||92|
|Amount Invested ($MM)||$1367.3||$1121.3||$837.9||$876.4||$635.9|
TOP 10 DEALS IN NEW YORK CITY
|COMPANY NAME||DESCRIPTION||CITY||ROUND TYPE||RAISED ($MM)||INVESTORS|
|Vice Media||Online media entity||Brooklyn||Growth Equity||$250||Technology Crossover Ventures|
|IEX Group||Equity trading venue/exchange||New York||Series C||$75||Spark Capital, Bain Capital Ventures, Franklin Templeton Investments, Steve Wynn, MassMutual Ventures|
|FanDuel||Online daily fantasy sports leagues||New York||Series D||$70||NBCUniversal, Kohlberg Kravis Roberts & Co, Bullpen Capital, Shamrock Capital Advisors|
|Pond5||Web-based stock footage marketplace||New York||Growth Equity||$61||Accel Partners, Stripes Group|
|Data Driven Delivery Systems||Healthcare platform for managing clinical approach for those with complex risk||New York||Series B||$60.8||Bessemer Venture Partners, MTS Health Investors|
|Bonobos||Men's clothing brand||New York||Series D||$55||Mousse Partners, Nordstrom, Coppel Capital|
|Jet.com||Stealth mode eCommerce company||New York||Series A||$55||New Enterprise Associates, Accel Partners, Bain Capital Ventures, MentorTech Ventures, High Peaks Venture Partners|
|Buzzfeed||Social news and entertainment||New York||Series E||$50||Andreessen Horowitz|
|xAd||In-store data analytics||New York||Series D||$50||Softbank Capital, Silicon Valley Bank, Emergence Capital Partners, Institutional Venture Partners|
|Genius||Online guide to the meaning of lyrics and other written publications||Brooklyn||Series B||$40||Dan Gilbert, Andreessen Horowitz|
*Quarterly tallies consist of equity rounds completed in the quarter and in which a venture capital or corporate venture firm participated in the round.
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