I got a call last week from a Bay Area venture capitalist who was gathering intel on the Pacific Northwest, wondering what the region was all about and how they might be able to make a mark in this mossy land.
Part of the discussion turned to valuations, and we discussed how a VC’s dollar can oftentimes go a bit further in Seattle and Portland than Silicon Valley. In other words, valuations just aren’t quite as frothy as the Bay Area, making the Northwest a potentially attractive spot to do deals.
Now, we’re getting some real evidence of that. Pitchbook, the Seattle-based private equity and venture capital database, was inspired by a story I wrote a few weeks ago in which angel investor Geoff Entress shared some of his insights on valuations.
Looking at its data, Pitchbook found that pre-money series A financing rounds in Washington and Oregon stood at a median $9.5 million over the past 15 months.
That compares to a pre-money valuation of $12 million for the entire West Coast and $12.44 million for California. In fact, Washington and Oregon are about in line with the rest of the U.S., where median valuations came in for series A deals at $9.18 million (Pitchbook obtains the data via regulatory filings and primary research).
Money certainly is flowing more freely in the Silicon Valley tech hub, so it shouldn’t be a surprise that valuations are higher there. Pitchbook explains in an email to GeekWire:
“As far as California goes, it may be a combination of more competition for money in Silicon Valley, the reputation of startup founders, and the fact that California startups tend to raise more in their Series A round than Washington companies, which usually means higher valuations. Our data shows California startups raised a median of $4.8 million in their Series A rounds since 2010, while Washington companies have raised a median $2.1 million in their Series A rounds since 2010. But looking at it since 2012 — Washington startups have increased their Series A fundraising amount to a median of $3.23 million. California is at $5.5 million since 2012.”
Here are some interesting data points for Seattle startups that raised series A deals recently, with valuation estimates from Pitchbook.
creativeLIVE: $8 million Series A round (3/11/2013) at a $30.5 million pre-money valuation. (GeekWire story here)
Blaze Bioscience: $8.5 million Series A round (2/22/2013) at a $17.9 million pre-money valuation. (GeekWire story here)
Rover.com: $3.38 million Series A round (4/12/2012) at a $9.02 million pre-money valuation. (GeekWire story here)
SNUPI Technologies: $1.75 million Series A round (12/11/2012) at a $4.14 million pre-money valuation. (GeekWire story here)