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Of course, that’s wishful thinking. Like it or not, San Francisco is the de facto tech startup and unicorn capitol of the Western Hemisphere. And yes, it’s really expensive.

Venture funding data indicates things are likely to stay that way. While there are a few startups that ditch the high rents for hip and comparatively affordable places like Austin, the notion of a mass exodus of tech talent isn’t borne out by the numbers.

The numerical reality is that tech startup financing continues to flood into San Francisco, and the city’s share of total investment is in fact, rising.

I Left My Term Sheet In San Francisco

So far this year, San Francisco-based companies have raised roughly 45 percent of all seed through pre-IPO funding for California companies tracked in the Crunchbase database. That’s up from just under 40 percent in 2018. In the chart below we look at how the percentages have altered over time:

It’s a pattern that’s been accelerating for a while. In the chart below, we look at funding in dollar terms for San Francisco-based companies and those based in any other city or town in California.

The general trendline is pretty clear. San Francisco has become a venture capital vacuum cleaner, sucking up cash even faster than its growing stable of unicorns can spend it.

It’s not just a late-stage thing either. Of course the city has plenty of high-valuation startups raising supergiant funding rounds. Even a list of got rather long, topped by gargantuan rounds for logistics platform and delivery unicorn .

But early stage and seed are active as well. For 2019, San Francisco’s stage-by-stage breakdown is as follows:1

• Late stage: 115 deals, collectively valued at $10.1 billion
• Early stage: 268 deals collectively valued at $5.14 billion
• Seed: 423 deals valued at $403 million

Average round size for San Francisco’s seed deals and early stage deals are also roughly in line with the rest of the state. It’s at the unicorn stage where we see the city’s share of supergiant financings tick up. There are at least 57 private, venture-backed companies with reported valuations of $1 billion or more that are based in San Francisco. And that tally doesn’t include the sizable list of local unicorns – Uber, Lyft, Slack, Pinterest, Cloudflare, etc. – that went public this year.

The chart below looks at round counts for San Francisco as a percentage of statewide totals.

And here, we look at how total round counts compare:

Is San Francisco’s Dominance A Good Or Bad Thing?

So, is it a good thing that a city of 47 square miles surrounded on three sides by water continues to slurp up so much of California’s venture capital commitment?

We reached out to Jeff Bellisario, interim executive director for the , which studies economic issues affecting the region’s livability and business competitiveness. His view is it’s not the rise of startups and unicorns that’s the problem — it’s the region’s failure to keep pace with this growth through investments in housing, transportation, and other infrastructure.

“We see the tech industry as our advantage. It is one of the reasons why our growth has been stronger than almost everywhere else in GDP and employment,” he said. Trouble is, municipalities and developers move slower than the scale-fast-and-break-things crowd, and the region has underinvested in infrastructure for decades.

It’s a sunnier view than some others take. A popular Washington Post feature story titled declares: “You no longer leave your heart in San Francisco. The city breaks it.” Its litany of locals’ woes includes pricey real estate, income inequality, $20 salads, the homeless, adult children unable to move out, non-tech workers unable to move in, and the relentless onslaught of “hyper-gentrification.”

Wherever you stand on the pros and cons of the techification of San Francisco, data indicates it’s not stopping. The current wave of startup investment, scaling and exiting continues to build. If dollars do leave the city, Bellisario predicts it’s likely they won’t go far. He sees potential for other regional cities, Oakland in particular, to absorb some of the overflow of startup-saturated San Francisco.

We’ll have more on that trend next week. But first, it’s time for a $20 salad break.

Illustration: .

, a freight forwarding and logistics platform, announced yesterday led by (surprise, surprise) , which is backed by government capital from Saudi Arabia and Abu Dhabi, among other sources. The deal reportedly Flexport at $3.2 billion, post-money.

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Existing investors , , , and Chinese express delivery firm also participated in the round. San Francisco-based Flexport was founded in 2013 and has been on a mission to digitally transform the multi-trillion dollar global logistics and freight forwarding sectors, both of which are notoriously fraught with inefficiencies and delays. Prior to this round, the company had raised a total of around .

With this deal, global logistics, supply chain management, and shipping funding (as defined by Crunchbase categories) is on the rise. Including this round from Flexport, over $2.5 billion has been invested in venture rounds raised by logistics, supply chain management, and shipping companies so far in 2019.

In 2018, over $13.38 billion was invested in the space, mostly concentrated in supergiant rounds raised by China-based and , as well as Indonesia-based .

Growth At Flexport

Last year was a good one for the startup.

, Flexport’s CEO and founder, wrote in a yesterday that in 2018 Flexport doubled its top-line revenue to nearly $500 million, upped its headcount to nearly 1,000 employees, and broadened its geographic footprint to 11 offices and warehouses globally. The company has 10,000 customers, according to Petersen.

Flexport, he wrote, is building what he described as an “Operating System for Global Trade,” or “a strategic operating model for global freight forwarding that combines technology and analytics, logistics infrastructure, and hands-on supply chain expertise.” As part of that, it’s looking to hire across the company and not just out of its San Francisco headquarters apparently.

Flexport is a alum and the accelerator is a fan. , Y Combinator co-founder and partner, is quoted on the company’s website as saying that Flexport “is one of those rare companies that will not merely satisfy its market, but grow it. There will be more international trade because of Flexport, and international trade is a very big thing for there to be more of.”

Petersen is not just a funding recipient, he is an investor himself. According to his Crunchbase profile, Petersen has personally invested in more than a dozen including delivery startup and fintech firm, .

Illustration: