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- Last year, a record $ 2.5 billion went to insurance startup deals in the US, and big insurers are all the way.
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The San Francisco Bay Area is a global powerhouse in launching startups dominating its industries. For the locals, this has always been a blessing and a curse.
On the bright side, the tech startup machine produces high-paying tech jobs and dollars that flow into local economies. On the other hand, it also exacerbates housing shortages and high living costs.
These topics were the biggest thing before the unicorn boom: Intel’s tech giants after all to Google to Facebook They have been expanding in Northern California for more than four decades. Lately, however, the question of how many tech giants the region can sustainably support is getting fresh attention, such as Pinterest, Uber. and other high-value local companies embarking on the IPO route.
Concerns of tech oversaturation led us to Crunchbase. News to see the question: To what extent do technology companies launched and based in the Bay Area continue to grow here? And what part of the employees work elsewhere?
For those dying over the inflationary impact of the local unicorn boom, the data offers a bit of reassurance. While companies founded in the Bay Area rarely move their headquarters, their workforces tend to disperse geographically much more as they grow.
Headquarters ≠ staff
Just because a business is headquartered in Northern California doesn’t mean that most workers are there, too. Headquarters, our survey shows, doesn’t always translate to staff.
“Headquarters location can often be the wrong benchmark for identifying where employees are,” said Steve Cadigan, founder of Cadigan Talent Ventures, a Silicon Valley-based talent consultancy. That is particularly the case for large technology companies.
Among Northern California’s largest tech companies, Crunchbase News found that most have less than 25 percent of their full-time employees working in the city where they are based. We present the details of 10 of the most valuable regional tech companies in the table below.
With the exception of Intel, all of these companies have double-digit percentage of employees at headquarters, so it’s not like they’re leaving town. However, if you’re a new hire at Silicon Valley’s most valuable companies, it seems like you’re more likely to be headquartered away from headquarters.
Tesla Meanwhile, it is a somewhat unique case. The company is based in Palo Alto, but it doesn’t crack the list of the city’s top 10 employers. In nearby Fremont, Yet in California, Tesla is the city’s largest employer, with roughly 10,000 workers working at its auto plant there (Tesla has about 49,000 employees worldwide).
Unicorns flock to San Francisco, workers not so much
High-value private and recently public technology companies can also be quite dispersed.
Although they tend to have a higher percentage of employees at headquarters than the more established tech giants, the unicorn crowd likes to spread their wings.
Take Uber, the poster boy for this trend. Although based in San Francisco, the automobile giant has less than a quarter of its employees there. Out of a global workforce of around 22,300, only 5,000 are SF-based.
It’s unclear if that kind of breakdown is typical. We had trouble putting together similar geographic counts of employees in other Bay Area unicorns, primarily because cities only generate figures for their 10 largest employers. Most of the regional unicorns are based in San Francisco, and of them only Uber made the Top 10.
That said, there is another rougher methodology for evaluating who works at headquarters: job postings. On several of the most valuable unicorns found in the Bay Area, including Airbnb, Juul, Lime, Instacart, Stripe, and the now public Lyft – A large number of open positions are far from head office. And as we wrote last year, private companies have been actively looking for cities to establish secondary centers.
Even for early-stage startups, it’s not uncommon to establish a San Francisco-area headquarters to access financing and networks, with most hiring being done elsewhere, Cadigan said. The evolution of collaborative work tools has also allowed more companies to add staff who work remotely or in secondary offices.
Also, of course, unicorn startups tend to be national or global in their approach, and that requires hiring where their clients are.
Take our jobs, please.
As we wrap up, it’s worth mentioning how unusual it was for the residents of a metropolitan area to oppose a large influx of highly skilled jobs. In recent years, however, these attitudes have become more common. The mixed reactions of Queens residents to Amazon’s HQ2 plans. And in San Francisco, a potential wave of newly minted IPO millionaires is causing some consternation among locals, along with jubilation among the crowd of realtors.
Yet just as college towns conserve space for new students as older students graduate, it seems reasonable that sustaining Northern California’s strength as a start-up center would require locating jobs out of the area as businesses grow. That could be good news for other cities, including Austin, Phoenix, Nashville, Portland, and others, which have become popular back-places for fast-growing unicorns.
That said, we are not forecasting a short-term contraction in Bay Area technology employment, particularly of the startup variety. The region’s huge entrepreneurial and business ecosystem continues to produce valuable well-capitalized newcomers to keep hiring.
We look only at employment at company headquarters (except Apple) . Companies on the list may have additional employees in other Northern California cities. For Apple, we include all Silicon Valley employees, according to Silicon Valley Business Journal estimates.
Numbers are rounded to the nearest hundred for the largest employers. Most of the data is for full-time employees only. Large technology employers predominantly hire full-time for staffing positions, so part-time, inclusive or not, is expected to reflect only a very small percentage of employment.
Cities list their top 10 employers in annual reports. We use annual reports or data extracted from Wikipedia, using the calendar year 2017 or 2018.