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Tech Investment Still Concentrated in a Few Zip Codes, Says Report

A few select neighborhoods attract the majority of startup funding in the U.S.

Venture capital investment is overwhelmingly concentrated in just a few select neighborhoods, according to a new report from urbanists Richard Florida and Karen King covered in CItyLab, suggesting tech investment hasn’t diversified as much as some have claimed or hoped, and that a significant engine for future business development isn't very geographically diverse.

The coauthors examined data from Thomson Reuters to identify zip codes with the greatest investment in startups working in software, biotech, media, medical equipment, and information technology.

The results shouldn’t come as a surprise. A third of venture capital investment in the U.S.—some $10 billion—can be found in just twenty neighborhoods within San Francisco, San Jose, Boston, Dallas, San Diego, and New York.

San Francisco’s Mission District and Rincon Hill neighborhoods were the hottest investment sites, accounting for more than $1 billion in funding each.

Florida and King note that a high number of these investment-rich neighhoods share certain key qualities, namely being urban centers in close proximity to major universities (UCLA, Stanford, MIT, and NYU).

"Despite ongoing predictions of the "rise of the rest"—the notion that high-tech startup activity is spreading to more and new areas of the U.S.—the reality is that venture capital and startup activity are extraordinarily clustered in a small number of neighborhoods across the country," wrote Florida.

America's Leading Startup Neighborhoods [City Lab]

San Francisco Rents Are So High That I Am Living in a Birdhouse [Curbed]