San Francisco has long enjoyed the title of being the best place for startups to grow and do well. But the rising real estate and living costs are driving people out. Because let’s face it, startups no longer need to be in a certain place, everything is digital now. Plus, they need to spend their resources more efficiently, and paying sky-high salaries is not the best way to do so.
And venture capitalists know this. They are realising this change in the industry. Even though the biggest tech companies in the world are based in SF, the newer ones who have the potential to do well need to be in other markets that are not as mature—those that have issues which can be resolved by new startups.
San Francisco is over. Talent won't stick around for more than a year. You're pulling your hair out to keep people.Marta Söjgren, partner at Swedish VC fund Northzone
Söjgren is one of the many VCs from the US, who are focusing on Europe—which is seeing an increasingly competitive startup ecosystem. "Europe is where the value-add is possible between funding rounds, you can get sometimes three times the value for European companies over the US for the same money."
"We're also now seeing more sophisticated investors coming into Europe, because the deal flow and talent base are popping up."Marta Söjgren, partner at Swedish VC fund Northzone