2012 might go down in history as the year that crowdfunding became more than just a hippie, feel-good pipe dream.
Kickstarter has utterly revolutionized hardware and robotics, breathing new life into industries that most VCs had turned their backs on. Meanwhile, AngelList has changed the way companies raise first rounds of venture capital in a huge way — possibly for the first time in Silicon Valley history.
While both are big shifts in the way companies are built, the AngelList one might be the more surprising of the two. Hardware companies, after all, had few other funding sources to turn to, so it was no surprise that when Kickstarter started to work for a few projects, everyone piled on. But in theory the classic early-stage shuffle up and down Sand Hill Road was working just fine for Internet companies. When AngelList was launched, few people believed that companies who had options would list sensitive information on a website and raise money that way instead.
We’ve known for a while those naysayers were wrong. But this morning, AngelList has put a number on just how wrong they were. Alum companies — companies that raised a round on AngelList in the early days — have gone on to raise a whopping $1.1 billion, both on and off the site. It’s not apples to apples, given that AngelList doesn’t operate a physical space with the level of mentoring that YC does. But the figures compare well with Y Combinator’s recent announcement that its grads had gone on to raise just over $1 billion, prior to the current class.
Some of the bigger names have included BranchOut, Uber, Getaround, Voxer and DuckDuckGo. (The full list with totals raised is here.) Not surprisingly, a few companies have raised rounds in the $30 million range, with a very long tail of smaller fundings for most everyone else.
The most dominant market is consumer Internet, a full $644 million of the funding. Within that category, social media companies have raised $337 million; mobile companies have raised $213 million; and ecommerce companies have raised $207 million. I was impressed that some unsexy categories have also done well: Enterprise companies have raised $171 million; clean tech companies have raised $83.7 million; and education has raised $42.3 million. (There’s some double counting in some of those totals, says AngelList’s co-founder Babak Nivi.)
As a virtual funding platform, AngelList should in theory be more useful for people living outside a tech ecosystem. But its successful alums have been concentrated in the usual tech ecosystems.
Slightly more than half of the money was raised by Silicon Valley companies. Out of the $572 million raised by Valley companies, $458 million of it was raised by companies based in San Francisco. We knew there had been a massive geographic shift from the Valley’s Peninsula-dominated history, but this stats really put the size of that shift into perspective. (Hence the 23 percent increase in San Francisco rents year-over-year.)
New York is not surprisingly the next most dominant market, with Gotham-based AngelList alums raising $136 million — double LA and three times the once-dominant Massachusetts. Austin-based AngelList companies have raised just $25.2 million, and other much talked about tech ecosystems like Seattle an Boulder didn’t even rank that high.
AngelList has a small international footprint, based on these stats. European AngelList companies have raised just $48.2 million; Canadian companies have raised $25.1 million; Russian companies have raised $14.8 million; and Indian companies have raised $12.7 million. Each of those are so small, they could be greatly skewed by just one deal.