2021 in Review: Looking Back on NYC Tech’s Banner Year

As long-time backers of early-stage startups in NYC, the team here at Primary has seen many iterations of this ecosystem—but we can say definitively that we have never seen a year like this. Between the maturation of the city’s diverse talent pools and record-breaking funding, more ideas are becoming powerful new realities here than ever before. And it’s not just that. The demand for tech talent is hitting an all-time high; new communities of support are coming together; Silicon Valley firms and big tech companies are showing a big uptick of interest in this market; city government is showing unprecedented support.

To celebrate all this, we’ve put together this highlight reel of the moments, achievements, and trends that made 2021 unlike any other year in New York tech history. Have your own thoughts to share? Let us know via the 2021 State of VC in NYC survey or @ us on Twitter.

More funding than ever before

To start with simple numbers, NYC saw a 300% increase in venture funding from H1 2020 to H1 2021. Through our own Quarterly Seed Reports, we saw a total of $877 million invested in seed-stage deals in this year’s first three quarters. And altogether, Tech:NYC estimates that NYC-based VC firms raised over $1.6 billion in funds.

Tech is NYC’s most in-demand skillset

An analysis of local job postings by Center for an Urban Future found that tech was by far the most in-demand profession in NYC. The need for tech workers outpaced even healthcare postings, despite the pandemic. The report pulls data from 2020, but ask any tech recruiter in NYC and they’ll tell you the trends are very much accelerating. (And by the way, we’re actively hiring tech recruiters here at Primary—email alicia@primary.vc if you know some good ones.)

Crypto and Web3

New York City was into crypto way before it was cool. Big players like Fireblocks, Chainalysis, OpenSea, and Paxos have operated from here for years, as have the Winklevoss twins’ suite of crypto bets—Gemini, BlockFi, Nifty Gateway, to name a few. But this year marked the first time Christie’s auctioned an NFT and crypto made the cover of New York Magazine (headline: “Can I SPAC my Stonks with NFTs?”). The NFT.NYC conference brought in 5,000 attendees, left another 3,000 on a waitlist, and caught the attention of outlets like The New York Times.

When city sites failed, TurboVax came to the rescue

The availability of COVID-19 vaccines at the beginning of 2021 was exciting. The rollout, chaotic. Disparate, decentralized websites quickly ran out of slots. Some people found success tracking what time new appointments went live, but Huge Ma created a better solution: a website scraper and Twitter account that could automate the spread of appointment information.

Silicon Valley firms move east

Much of the cash flowing into the local startup ecosystem is from home-grown firms, but Silicon Valley shops are also jostling in, with a boom of previously west coast-only firms opening and staffing outposts in NYC: a16z, Accel, Canvas, Cowboy, Felicis, Haystack, Lightspeed, Norwest, Ribbit, Susa, and Threshold, to name a few. As YC legend Sam Altman put it: “Feels like every fourth bay area tech person I talk to is moving to New York.”

A superlative city

While the New York market is becoming ever more competitive with Silicon Valley’s, its founders are also nabbing worldwide superlative distinctions, from the youngest woman CEO of a multi-billion dollar startup to the largest Series A round of all time.

With NYC-based Spring Health’s $190 million Series C at a $2 billion valuation—from Kinnevik, Guardian Life, Tiger Global, Rethink Impact, and Work-Bench—Cofounder and CEO April Koh became the youngest woman CEO of a multibillion-dollar startup.

In July, NYC-based Adam Schwartz raised $1.5 billion in Series A funding for online training app software company Articulate. The company called it "one of the largest Series A rounds in history," and Protocol had trouble finding any larger examples. Writer Biz Carson pointed out that this mega-raise isn’t just about funding markets: Articulate has been bootstrapped for 20 years, employs over 300 people, and serves more than 100,000 customers. The company was able to grow far beyond what investors typically see from a Series A-phase company, to the credit of this excellent founder and his team.

Big tech players prove the office is far from dead

Shared office space companies undoubtedly had a tough couple years. Knotel filed for bankruptcy and saw its one-time valuation of $1.6 billion largely evaporate, ending in a reported $70 million sale and inimical takeover. WeWork did get back on the public markets horse after its public meltdown two years ago, but with a dose of reality that took valuations down from $47 billion to $9 billion.

But larger tech companies are making very sizable bets on the importance of convening in person. In late September, Google announced its purchase of the St. John’s Terminal in Hudson Square. At $2.1 billion, it’s the most any company has spent on U.S. office space over the course of the pandemic. Just a week later, Hudson Yards’ Manhattan West opened its mixed-use space with tenants like Amazon.

A new mayor eager to work closely with the tech sector

This year’s election was a particularly entertaining one, from Andrew Yang’s attempts to eat his way through NYC to Curtis Sliwa’s attempt to bring his cat to the polls. The news we’re really paying attention to? Winner Eric Adams has already signalled he’ll be much more closely aligned with New York’s tech leaders than Bill de Blasio was. He wants to accept his salary in bitcoin and teach crypto in schools. Tech:NYC Founder and Executive Director Julie Samuels says, “I’ve seen first-hand how committed New York’s tech community is to the success of this city, and how eager they are to work with the public sector toward that shared goal. Under Eric Adams, that could happen at a scale we have not yet seen. Mayor-elect Eric Adams understands what tech can do in terms of economic opportunity and mobility for New Yorkers in every borough, and I anticipate his administration will seek out more partnerships across the sector to make it happen.”

NYC becomes an even more on-demand city

It’s possible we’ll look back on COVID lockdowns as the period that introduced a new era of convenience businesses across just about every sector.

We saw medical care and wellness become more convenient and accessible via newly normalized and in many cases insurance-covered telehealth, a trend we saw positively affect NYC businesses as diverse as Ro’s patient-centric platform, Tia’s women's health clinics, Alma’s platform for therapists, Balanced’s fitness classes for older adults, K Health’s AI-chat and on-demand-doctors platform, Curex’s telehealth allergy care, Allara’s virtual care for polycystic ovary syndrome, Hone’s online clinic to help men optimize their hormones, Marker Learning’s virtual learning disabilities assessments, and Perry Health’s remote clinics for people living with Type 2 diabetes.

NYC fintech moved much faster than it might have without pandemic disruptions. Current attracted digital-first banking customers with features like early access to direct deposited paychecks, overdraft coverage without fees, and budgeting tools—and tripled its valuation to $2.2 billion over the course of just five months. Investment-management app Titan grew more than 500% over the course of the pandemic. Alloy helped banks adjust to the new digital normal with tools for identity and decisioning. Orum promised a future of fast, frictionless financial infrastructure.

We’re also seeing a rising trend in instant delivery of products we once went out to get ourselves. There’s fierce competition (and competitive discounts) among Gopuff, Jokr, Buyk, and Gorillas, to name a few. Billions in funding has flowed into the category, and “dark stores” have popped up in just about every neighborhood to facilitate these ultra-fast deliveries. Meanwhile restaurant tech companies like Lunchbox are now also increasingly catering to delivery-only “ghost kitchens” and cloud concepts—and NYC-based restaurant website platform BentoBox saw a great exit via acquisition by Fiserv.

Hardware gets a little easier

As the tech ecosystem in NYC becomes more sophisticated, the more challenging business of hardware is finding stronger footholds. Latch, the smart lock company now in 1 in 10 new apartment buildings in the U.S., went public through a SPAC with Tishman Speyer Properties. Robotics software startup Viam signed a 10-year lease for a 54,000 square foot space just across the street from Lincoln Center. Brooklyn-based Bedrock Ocean is using an autonomous electric submarine to map the ocean and provide better data for naval navigation, climate change models, offshore wind farms, marine wildlife protection, and more. And though Peloton’s performance atrophied as gyms reopened, we’re proud to share a home with the brand that became such a beacon of quarantine wellness.

The evolution of ecommerce

With IPOs of home-grown brands like Squarespace, Warby Parker, and Rent the Runway, we’re seeing a sector the city has been particularly known for growing up. We’re also seeing it evolving. For example, the Pattern Brands team (formerly of iconic launch studio Gin Lane) turned to a Shopify roll-up model to help bridge the gap between small businesses and big market opportunities. The pandemic has made touchless technology even more appealing—just look at the cashierless store Starbucks Pickup and Amazon Go opened in Midtown.

No cap: Gen Z VCs

Though the Gen Z VCs community of over 11,000 is technically global, founder Meagan Loyst is based here in NYC as an Analyst at Lerer Hippeau—and she tapped some of the city’s best young leaders, including our own Lia Zhang and Jason Shuman, to share wisdom at the first-ever virtual Gen Z VCs Summit.

On Deck NYC inaugural class

This summer, the On Deck founder community platform introduced the NYC Tech Drop, bringing together 80 founders, operators, and investors from all over to New York City for a three week Fellowship experience. Primary Analyst Kai Cash was one of those attendees. “During the three weeks we attended fireside chats and panels with experts like Ankur Nagpal, Rebecca Kaden, Kendrick Nguyen, Megan O’Connor, Peter Boyce, and many more. More importantly, every day was a chance to make a new friend at the water cooler, over dinner, or walking through the park. After the three weeks, fellows walked away with lifelong connections, a deep passion for New York City, and some walked away with cofounders!”

In Memoriam: Glen de Vries

Medidata cofounder Glen de Vries paved the way for so much: He cofounded New York City’s first big SaaS startup, which recently notably contributed to COVID vaccine trials. He devoted his fortunes toward philanthropies like water.org, Carnegie Mellon’s Mellon College of Science endowment, and his own adventures in space—he was on the same Blue Origin flight as William Shatner and was an impassioned advocate for exploration. And he had become a passionate supporter of a next generation of founders, generously offering his time and expertise to founders at every stage, and every single time approaching those engagements not as the ‘been there-done that’ expert, but with a humility and respect that made every founder he touched believe they could build a multi-billion-dollar enterprise just like Glen had.

While Glen was only just taking his support of our broader ecosystem to a next level, we tragically lost this pillar of our community last month. Just weeks removed from his space voyage, Glen died tragically in a plane crash, a monumental loss to the New York City startup community and his many friends within it.

As Primary General Partner Brad Svrluga put it, “Glen de Vries was the best board member I ever sat around a table with. And a good friend. He built the first big SaaS company in NYC, was a titan of our community, a complete and utter badass, and had the biggest heart imaginable. This is a monster loss.”

Roger Ehrenberg’s Retirement

As the Founding Partner of IA Ventures, Roger Ehrenberg spent more than a decade making seed-stage investments in companies like The Trade Desk, Wise, Simple, and Recorded Future and getting in on crypto earlier than most. The first of the OG ‘SuperAngels’ in NYC to institutionalize himself, he built a model partnership and firm at IA. He also retired earlier than most, at 55 years old. While this complex time at the intersection of historically strong returns in VC and all the complexities of COVID has inspired the retirements of other heavy hitters like Spark’s Bijan Sabet and Lightspeed’s Jeremy Liew, Roger was the most notable New Yorker to bow out of the game this year. Big kudos for being an early believer and paving the way for the city’s reputation as a great place to fundraise. We’re sorry to see you setting down the checkbook, Rog.