Three years ago, Compass — a three-and-a-half-year-old, San Francisco-based company that provides reporting and benchmarking software to startups around the world — produced a widely read report on the global startup ecosystem.
Now, armed more than 200 interviews with entrepreneurs from 25 countries; 11,000 startup surveys; and insights from a long list of data and content partners, including CrunchBase, Deloitte, and Dealroom, Compass has produced another intriguing round-up centered on which startup scenes are gaining momentum around the globe.
The report, which you can check out here, is dense with findings. For those of you pressed for time, some key takeaways include that:
1.) Ecosystems have become more international from almost their outset, says Compass. According to its report, 37 percent of all funding rounds in the top 20 ecosystems in 2013 and 2014 had at least one investor from another region. (In North America, the number is slightly higher at 41 percent.)
The number of startups that either opened second offices elsewhere or moved their headquarters from one ecosystem to another region rose 8.4 times between 2012 and 2014. Singapore, for example, is a “very good place to be,” notes Compass CEO Bjoern Herrmann. “Many companies that start in Kuala Lumpur or Jakarta move over because the [investor] money is there, it’s easy to open bank accounts, and you have a good regulatory framework, among other things.”
Another component of more international teams: The number of foreign employees employed by startups. On average, foreign employees working at startups within the top 20 ecosystems represent 29 percent of those companies’ workforces. In Silicon Valley, the average is 45 percent.
2.) Exit values are on the rise, says Compass, whose findings show that, across the top 20 startup cities, exit value soared 78 percent annually between 2012 and 2014. (M&A exits accounted for 60 percent of those exits; IPOs accounted for 40 percent.)
Growth is relative, Herrmann notes. Most notably, he tells us, “We see Silicon Valley growing at a 47 percent rate over the last two years [but] many other ecosystems are growing at a much faster pace.”
The exit value of startups based in London, for example, has quadrupled since 2012, while Berlin has grown by a factor of 20, primarily owing to the two big IPOs of Rocket Internet and Zalando. Bangalore has meanwhile seen five times more exit value last year than it did in 2012. (If it’s any consolation to Silicon Valley denizens, Compass expects growth to even out a bit over time.)
3.) Venture capitalists are pouring tons of money into startups everywhere. Across the top 20 ecosystems, says Compass, VC dollars rose 95 percent between 2013 and 2014.
Those ecosystems with the most growth in venture dollars were Berlin, which saw a 12x increase between 2013 and 2014; Bangalore, which saw a 4x increase; Boston, which saw a 3.7x increase; and Amsterdam and Seattle, which both saw a 2x increase in the number of venture dollars invested in local startups during that same period.
Again, for the full report, click here. In the meantime, if you’re curious about which cities are among the “top 20″ startup ecosystems — and these are ranked from the most- to the least-dominant based on performance, capital invested, and “talent” — they are: Silicon Valley, New York, L.A., Boston, Tel Aviv, London, Chicago, Seattle, Berlin, Singapore, Paris, Sao Paulo, Moscow, Austin, Bangalore, Sydney, Toronto, Vancouver, Amsterdam, and Montreal.
You can also take a quick look here at Compass’s ranking table with changes from 2012.
Comment