For all the talk about San Francisco’s decline, data repeatedly shows that the Bay Area, including the city itself, remains the best place for venture-backed startups.
Startups located in the Bay Area absorbed $90 billion in venture capital investment in 2024, or 57% of the $178 billion in global venture capital funding spent last year, according to new statistics released Tuesday by Crunchbase.
In 2024, OpenAI, headquartered in San Francisco, was obviously the mothership, both in giving birth to a nearby AI startup industry, complete with its own deep-pocketed startup fund, and in dollars of venture capital that she collected for herself. But others include: San Francisco’s Databricks and its record $10 billion in funding; Elon Musk’s xAI, which raised $12 billion in two rounds last year and quickly moved into OpenAI’s former headquarters in San Francisco’s Mission District; Mountain View’s Waymo and its $5.6 billion Series C; San Francisco’s Anthropic, which has raised more than $8 billion in 2024; plus big raises in 2024 from San Francisco’s Scale AI and Perplexity.
And as we have already noted, this is not a coincidence. This is a result of the region’s dominance in AI, the biggest technology of 2024, as well as being home to big tech (Google, Nvidia, Salesforce, etc.) and infrastructure of long-standing startup – from Y Combinator to the land of VC. from Sand Hill Road.
This self-fulfilling cycle shows no signs of slowing in 2025, in part because the Bay Area still offers the largest concentration of skilled technology employees. According to SignalFire data, about 49% of all Big Tech engineers (often tomorrow’s startup founders) and 27% of startup engineers are based there.
With such a density of everything from financiers to engineers, meeting the people needed to build a startup is just easier, say the founders, who moved to San Francisco in 2024. “We feel like the breeding ground talent is better. Plus, the customer pool is better,” Anh-Tho Chuong, co-founder and CEO of open source billing platform Lago, previously told TechCrunch.
