Virginia ranks 8th in the U.S. for VC investments

In 2023, the state’s businesses received nearly $2.5 billion in funding

Published

September 26, 2024

By

Beth JoJack

Virginia was ranked 8th in the nation for venture capital investments in 2023, the state’s highest ranking to date and the first time in the top 10 in 15 years, according to an announcement Thursday by the Virginia Innovation Partnership Corp. VIP).

Earlier this month, VIPC hosted an event at Amazon.com’s headquarters in Arlington County, attended by National Venture Capital Association President and CEO Bobby Franklin and state and local officials. The NVCA publishes an annual report listing venture capital funds in all 50 states and the District of Columbia annually.

According to VIPC calculations based on NVCA data, Virginia recorded $2.484 billion in venture capital deals in 2023, ranking it eighth in the nation, just ahead of Illinois, which had $2.397 billion. California tops the list with $79.2 billion, followed by New York, Massachusetts, Texas, Colorado, Florida and Washington.

Neighboring states of North Carolina and Tennessee ranked 13th and 14th, with $1.87 billion and $1.7 billion, respectively.

The NVCA yearbook released in May lists 235 companies in Virginia that received VC funding last year, representing 1.81% of companies nationally that received venture capital investment. The report shows Virginia-based companies raised $1.87 billion in VC funding in 2023, up from $792 million in 2022 and down from a record high of $2.82 billion in 2021. On the other side of the ledger in 2023, Virginia had 90 active investors, significantly fewer than the 1,000-plus investors in California and New York, but within the top 20 states.

“The Commonwealth is not only competing but outperforming peers in attracting investment thanks to a supportive innovation landscape and a growing number of start-ups,” Franklin said in a statement.

NVCA’s Top 10 ranking comes in the year that Virginia was named CNBC’s “Best State for Business in America” ​​and when VIPC celebrated its 10,000th anniversary. new, high-growth startups emerging in Virginia during the first two years of Gov. Glenn Youngkin’s administration.

“Virginia’s top 10 national rankings demonstrate how Virginia’s dynamic, high-growth companies offer compelling capital investment opportunities for VC investors across the country,” said Joe Benevento, president and CEO of VIPC. “Capital powers growth, and VIPC looks forward to continued private sector engagement and investment in our thriving entrepreneurial ecosystems, including through our new Virginia investment venture capital partnership initiative.”

In May, VIPC announced a partnership with seven venture capital fund managers will invest $100 million in 100 Virginia-based startups. VIPC expects Virginia Invests to attract at least $10 in private sector investment for every dollar VIPC commits, according to Thursday’s announcement.