Despite the economic uncertainty of the past two years, the East Bay’s venture capital activity performed remarkably well in 2021, setting a new record to the tune of $10.38 billion, and off to a solid start with nearly $4.4 billion at the close of Q1-2022. Over the ten-year period, venture capital investments into East Bay companies have risen dramatically—a ten-fold increase in ten years. The amount jumped 87 percent between 2020 and 2021, closing the year with 505 deals primarily in the forms of Early and Late-Stage funding, while some startups received funding from Angel investors, Accelerator/Incubators, Grants, and Crowdfunded deals.
Source: Pitchbook; Analysis by Beacon Economics & East Bay EDA *2022 data is Year-to-Date through March 29, 2022
What’s Being Funded?
Venture investments in the East Bay are diversified across both industries and verticals. In terms of industries, which is generally referred to a broad group of companies engaging in a general activity (think traditional NAICS codes), venture-backed East Bay companies are aiming to transform industries of Information Technology (34%), Healthcare (21%), Consumer Products (18%), Materials & Resources (10%), and Energy (8%).
Unlike traditional industries, an industry vertical refers to a more specialized group of companies that focus on a shared niche or specialized market spanning multiple industries, as described by financial data company Pitchbook. Unsurprisingly, many venture-backed companies utilize various technologies and therefore do not fall neatly into a single vertical, although they might target a certain end-user or industry market. In the East Bay, dominant industry verticals include Artificial Intelligence & Machine Learning, Autonomous Cars, Biotech, CleanTech, Digital Health, and FoodTech.
The top five cities of Oakland, Berkeley, Fremont, Emeryville, and Alameda constitute over $8.5 billion, or 70% of all venture capital received in the East Bay. These cities also attracted the largest deals in 2021, led by Sila (Alameda), Fivetran (Oakland), Pivot Bio (Berkeley), Pony.ai (Fremont), and Perfect Day (Emeryville). The fast-growing and innovative Tri-Valley cities of Pleasanton and San Ramon received nearly 9 percent of all East Bay venture capital. Among the largest deals in the Tri-Valley include Tekion (Pleasanton), Degreed (Pleasanton), and Dialpad (San Ramon).
Top Deals in 2021