2017 was a down year for angel/seed funding in NYC! Despite the continued growth in NYC’s startup ecosystem, particularly from eager first-time entrepreneurs, the number of seed deal funded in 2017 declined to 235 from 328 in 2016, a decline of 28%, according to AlleyWatch.
Seed stage funding in NYC declined to $361 million in 2017, from $483 million in 2016, a decline of 25%.
While the data from other markets has not been assembled, I don’t expect NYC is an outlier: 2017 was the year of me-too startups, with companies piling on and overhyping areas like AI and Big Data. Investors saw through the clutter to be more selective in 2017. Median round size increased to $1.25 million, up 25% from $1 million, a sign that investors were more confident concentrating more money in fewer deals.
New York City’s Hottest Start up Neighborhoods! The zone is Silicon Alley/Midtown South/Chelsea/Flatiron, centered around Broadway and above Broome St/Canal St and below 34th Street. Courtesy of ERA graduate The Square Foot.
Guess who’s fueling Silicon Alley’s rise? While angels and early stage funds provide the early sparks, the big bucks are coming from the west coast. For example, Fab’s $160 million Series D is the largest VC investment round in a NYC-based company since 2009. But Menlo Ventures and Andressen Hororwitz from the Other Coast lead the list of VC’s in the round. Below, from CB Insights, are Silicon Alley’s top 10 VC investment rounds in NY-headquartered companies since 2009. And note – Fab and GILT are listed twice.
Yodle, the leading Silicon Alley-based digital marketing platform for small businesses, is “strongly considering” an IPO, according to CEO Court Cunningham, as reported by Street Fight.
Yodle is profitable and generating over $130 million in revenue annually, Cunningham said recently.
Yodle bought Atlanta-based Lighthouse 360, it was reported today. Lighthouse 360 has built an advanced customer relationship management (CRM) system for dental offices which reportedly does a terrific job integrating all those systems in a dentist’s office. Yodle plans to expand the technology each of its 30 verticals.
NYC-based Yodle is perfecting a telemarketing approach to small businesses across the USA. Yodle sells digital advertising solutions to 30,000 customers and generates about $130 million in revenue. This post from Kelsey Group explains some of CEO Court Cunnigham’s methods:
Cunningham tells us that by analyzing the metadata around the call activity (call duration, outcome, etc.) it generates for customers, as regular analysis of nearly 150 million keywords has led Yodle to a number of insights that have led Yodle to make tactical decisions that defy conventional wisdom.
One such example involves the number of times a company can contact a sales prospect unsuccessfully before “burning” the lead. Yodle has determined from statistical analysis that it is possible to contact a record (sales prospect) considerably more times (more than 2X) than conventional wisdom suggests.
Cunningham also has a lot of unconventional things to say about sales effectiveness.
“Drive, persistence and optimism are the attributes that equate to success in a sales reps, and everyone knows that,” Cunningham says. “Yet most companies don’t interview for these attributes.”