For all the chatter about the decline of San Francisco, data repeatedly shows that the Bay Area, including the city itself, is still the best place for venture-backed startups.
Startups located in the Bay Area vacuumed up $90 billion of VC investment in 2024, which was 57% of the $178 billion of US venture funding spent last year, new stats released on Tuesday by Crunchbase show.
In 2024, OpenAI, headquartered in San Francisco, was obviously the mothership, both in spawning a nearby AI startup industry complete with its own deep-pockets startup fund, and in the VC dollars it scooped up for itself. But others include San Francisco’s Databricks and its record-breaking $10 billion in funding; Elon Musk’s xAI, which raised $12 billion in two rounds last year and promptly moved into OpenAI’s old headquarters in the San Francisco Mission District; Mountain View’s Waymo and its $5.6 billion Series C; San Francisco’s Anthropic, which raised over $8 billion in 2024; and big raises in 2024 from San Francisco’s Scale AI and Perplexity.
And, as we previously reported, this isn’t just happenstance. It’s a result of the area’s dominance in AI, the biggest tech of 2024, as well as being home to Big Tech (Google, Nvidia, Salesforce, etc.) and having a long-standing startup infrastructure there — from Y Combinator to the VC land of Sand Hill Road.
This self-fulfilling cycle shows no indications of flagging in 2025, in part because the Bay Area still offers the largest concentration of skilled tech employees. Some 49% of all Big Tech engineers (often the startup founders of tomorrow) and 27% of startup engineers are located there, according to data from SignalFire.
With such high density of everything from financiers to engineers, meeting the people necessary to build a startup is just easier, say founders who’ve relocated to San Francisco in 2024. “We feel like the talent pool is better. Also the customer pool is better,” Anh-Tho Chuong, co-founder and CEO of open source billing platform Lago, previously told TechCrunch.
Correction: This post was updated to reflect total funding was US only, not global.
