Despite all the talk about San Francisco's decline, data repeatedly shows that the Bay Area, including the city itself, remains the best location for venture-backed startups.
Bay Area startups siphoned off $90 billion in VC investment in 2024, representing 57% of the $178 billion in global venture capital spent last year, according to new statistics released by Crunchbase on Tuesday. do.
In 2024, San Francisco-headquartered OpenAI was clearly the mother ship in spawning a nearby AI startup industry, both with its own deep-pocketed startup capital and the VC money it raised itself. But others include San Francisco's Databricks and its record $10 billion funding. Elon Musk's xAI raised $12 billion in two rounds last year and quickly moved into OpenAI's former headquarters in San Francisco's Mission District. Mountain View's Waymo and its $5.6 billion Series C; San Francisco's Anthropic raised more than $8 billion in 2024. Significant increases from San Francisco-based Scale AI and Perplexity are also expected in 2024.
And, as we previously reported, this is no mere coincidence. This is a result of the region's dominance in AI, the biggest technology of 2024, home to big tech (Google, Nvidia, Salesforce, etc.) and long-standing startups from Y Combinator to VC Land. It's because the infrastructure is there. of Sand Hill Road.
This cycle of self-actualization shows no signs of slowing down in 2025. One reason for this is that the Bay Area still has the highest concentration of skilled technology employees. According to data from SignalFire, about 49% of all Big Tech engineers (often the founders of tomorrow's startups) and 27% of startup engineers are based there.
Founders who moved to San Francisco in 2024 say it's much easier to meet the people they need to launch their startups because of the high concentration of everything from investors to engineers. Also, the customer pool has gotten better,” Anh-Tho Chuong, co-founder and CEO of open source billing platform Lago, previously told TechCrunch.