Venture capital funding: U.S. vs. Africa


I came across “All the world’s a stage” over on Substack, with the following graph:

Do note that the select countries in the box are a blow-up of the bottom left corner. $11 per capita in Kenya, the hottest startup funding market in all of Africa.

That made me wonder what the equivalent statistic is here in Seattle. A quick search found 2020 data from Statistica on venture capital, by U.S. State:

$4.8 billion in venture capital in Washington State. 99% of that is in the Seattle Metropolitan Area (where I live), which from the latest census has 4 million people. Dividing those number is easy: $1,200 of venture capital per capita, over 100x more than in Kenya.

Venture capital in Massachusetts is similarly concentrated with 99% in Boston, Cambridge, and the Boston suburbs. $17 billion divided by 4.9 million people: $3,500 per capita.

New York is a little more complicated, as the 20 million people in the New York City metropolitan area live in three states. But most of the venture-scale companies are based in New York City itself, where just 8.4 million people live. Thus the per capital venture capital in New York is somewhere between $900 and $2,100 depending on which population base you use, higher if we just looked at Manhattan and Brooklyn where the startups nearly all reside.

California is similarly concentrated, but then again, if we are trying to comparing apples to apples here then we should divide the Kenyan venture capital total by the 4.4 million population of Nairobi instead of the total 52 million citizens of Kenya. That would grow the Nairobi venture capital metric to $130. Progress, but still just 1/9th of Seattle and 1/27th of Boston.

To tackle the elephant of venture capital, let’s divide the massive, record-setting $84 billion of venture capital in California by the total 39.5 million Californians, and by the 8.7 million people living in “The Bay Area”. That results in $2,470 per capita for all of California (vs. $11 in Kenya) or a massive $9,650 per capita in the Bay Area (vs. $130 for Nairobi).

Any way you cut it, venture capital is an industry that is highly concentrated in where it operates, and certainly is not an industry where the money goes where it is needed the most, but instead tends to be invested where investors have chosen to live.

By "Luni"


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