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VC’s regain some confidence, but investors maintain caution in the market

  • ​VC funds are being raised, but the number of transactions has been on a decline for the past 24 months. Money is mostly focused on series B,C, and D tech companies, resulting in greater challenges for seed startups. Though quarterly volume is up due to a large funding round, cumulative YTD levels are flat.
  • The growing number of new startups bootstrapping to industries such as automotive, AI and retail is fueling growth in the local tech sector, spurring demand for real estate as companies are battling for talent to grow their headcounts.
  • With VC looking closer at long-term profitability, startup expansion has been at a more conservative level. The shift in demand has been moving towards submarkets like Downtown San Jose where rents are less expensive. As a result, Downtown is seeing the local tech scene grow with companies such as Cohesity and Intaact landing leases greater than 40,000 square feet and Google looking to plant their flag. ​

Source: JLL Research, PwC Moneytree​

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