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Business Insider
13-06-2025
- Business
- Business Insider
Why consumer tech founders are choosing SoHo over Silicon Valley
In March, Teddy Solomon said goodbye to Silicon Valley and moved across the country to New York City. The 23-year-old founder of the Gen-Z social app Fizz had spent most of his life in the Bay Area, but was eager to move to what he saw as a buzzy hub for consumer tech. "We realized over the years that New York was becoming hotter than the Bay Area," Solomon told Business Insider. He took the company with him. Fizz moved its 20-plus staffers from Palo Alto to Manhattan's bustling SoHo neighborhood. Around the corner, on one of SoHo's famous cobblestone streets, is the 22,000-square-foot office for events platform Posh. Steps away is La Cabra, a café across the street from OpenAI's New York office that has become a hot spot for tech workers. Meanwhile, across the bridge in Brooklyn, startups like digital goods marketplace Whop — which was valued at $800 million in 2024 — and Gen Z's go-to party invite service Partiful have set up shop. New York's consumer tech scene — startups building tech for everyday people rather than businesses — is having a moment. But it's not the first time. The city has long played host to breakout consumer darlings like Glossier, ScentBird, and AptDeco, brands that helped define the VC-backed direct-to-consumer boom of the 2010s before the model began to show cracks. And with the rise of a crop of prominent new consumer startups, New York is experiencing a "consumer renaissance,' as Derek Chu, a principal investor at FirstMark Capital (which backed Posh), put it. "There's a community of founders that builds together in person here in New York," he said. "People want to be here, together, in person, where it's one of the best places in the world — if not the best — to do that. The surge has even reignited one of tech's favorite fights: New York vs. San Francisco. This month, the discourse pulsed through the air at New York Tech Week. "People want to be in New York right now," said Julie Samuels, CEO of Tech:NYC, a nonprofit that works with tech leaders in the city. "One of the most important things I love about working in tech in New York is that people are New Yorkers first. To build in the tech industry here, you really have to love New York." That said, the San Francisco Bay Area still holds the crown in venture funding. According to a report by PitchBook and the National Venture Capital Associate, the Bay Area continued to far outperform New York in the first quarter of 2025, with 658 VC deals totalling $58.7 billion compared to 441 deals totalling $7.1 billion, respectively. The same report also found New York to be the city most friendly to female founders, with 372 deals in the first quarter. Consumer tech's comeback Remember Warby Parker, Glossier, and Casper? These consumer brands were the face of a new wave of startups in the 2010s. They were design forward, digitally native, and ready to spar with dusty incumbents — and they were also New York born and bred. Thanks to the success of these companies and others, the city became a magnet for direct-to-consumer startups across fashion, beauty, lifestyle, and other categories. The momentum didn't last, however. Customer acquisition costs soared, supply chains got complicated, and many of these companies struggled to turn buzz into profits. The pandemic heightened the troubles facing many brands as it exposed the fragility of global logistics and hammered consumer spending. At the same time, investors started chasing other shiny objects. The stalwart enterprise software industry promised steady returns. Crypto and Web3 were capturing investor imagination. In comparison, a lot of VCs retreated from consumer tech. It was a tough sell: capital-intensive, with thin margins and operational headaches. At first, the rise of artificial intelligence seemed like another death knell for consumer investing. According to Crunchbase data, investments in consumer-focused social companies slumped to $900 million across just 128 deals in 2024, down from a $3.1 billion peak across 487 deals in 2021. Only 6% of top VC firms' bets went to consumer startups in 2024, according to an analysis of PitchBook data by Silicon Valley Bank. But what was once viewed as a setback for consumer startups is now shaping up to be their biggest opportunity, investors and analysts say. AI, which initially pulled investor attention away from the space, is now powering a fresh wave of innovation. A new class of savvy startups is seizing on the technology to rethink how consumer businesses are built, from product development to operations and customer experience. They're positioning themselves to lead in this next chapter. If consumer tech was previously defined by direct-to-consumer plays and mobile apps, this next generation will be shaped by AI. "AI remains the top investment theme for the consumer and is the largest opportunity since the internet," Bank of America's Justin Post wrote in a recent analyst note. "Business models around AI are progressing faster than historical norms, and are high quality as consumers are more willing to pay for services." New York, New Consumer If they're not at a coffee meeting at either La Cabra in SoHo or Devocion in Flatiron, you may spot some of New York's consumer tech founders at social hot spots like coworking space Verci, working out at the SoHo Equinox location, or sweating it out at the Othership sauna that's right around the corner from many of the city's VC offices. "If we leave the office at 10 p.m., you still have hours to be able to go do whatever you want, from a comedy show to a bar to anything else going on here," Solomon said. Run clubs, poker nights, and rooftop happy hours on any given weekday night overlap with the vibrant arts, music, and social scenes that give life to the city. "It's human," said Alexandra Debow, CEO of photo-sharing app Swsh. "New York is culture. New York is TV. New York is Gossip Girl." Consumer tech founders also have access to adjacent industries that provide a symbiotic relationship, like marketing and advertising firms, content creators, and several of the largest banks. And just like any other 20-something starting out adulthood in New York, the city offers its own challenges that build grit for those running startups. Posh CEO Avante Price said keeping up with the pace of New York was like keeping up with the pace of a startup. Peter Boyce II, the Brooklyn-based founder of Stellation Capital and a former partner at General Catalyst, described New York's current generation of consumer founders — many of whom are Gen Z — as "building new ways to connect with each other" through novel and niche social networks in a post-pandemic world. (Boyce is an investor in Swsh.) For instance, Sitch, a dating app with an AI-powered matchmaking experience, has ads plastered all over the city. New York is also home to IRL ('in real life') social startups like 222 (which moved from LA to NYC in 2024) and Kndrd. "Founders in New York that are really successful in consumer social are successful because they have this ability to be tapped into the world," said Anant Vasudevan, a cofounder of Verci. Michelle Yin, the cofounder of social app Housewarming, said she felt everyone doing consumer social in New York knows each other. Meet some of NYC's new consumer startups Startup Category Year Founded Doji AI 2024 Sitch Dating 2024 Swsh Social 2022 Pickle E-commerce 2022 Whop E-commerce 2021 Dub Fintech 2021 Partiful Social 2020 Posh Social 2019 Kalshi Fintech 2018 There will always be San Francisco Now, we come to the thorniest question: Will New York supersede San Francisco and Silicon Valley as a tech hub? Probably not. The West Coast is still a go-to for engineering talent, deep tech, and AI. "If you're doing B2B SaaS, SF is the place to be. If you're doing deep AI tech, SF is the place to be," said Michael Giardino, CEO of AI consumer app startup Oleve, who is based in New York. SF has also produced many, many consumer success stories. DoorDash, Airbnb, Instacart, and Uber were all built in the Bay Area, as were direct-to-consumer darlings Everlane and Allbirds and consumer telehealth juggernaut Hims and Hers. But even some of tech's most venerated venture capital firms, like Menlo Park-headquartered Andreessen Horowitz, are singing New York's praises. "NYC has become the best tech hub if you're not on the West Coast," A16z's Andrew Chen recently wrote on LinkedIn ahead of New York Tech Week. Katia Ameri, another A16z partner, echoed this as Tech Week wrapped. "Since the pandemic, NYC has become the top tech hub outside the Bay Area, and that momentum was clear at NY Tech Week," Ameri wrote on X (formerly Twitter) in June. "The city is now a global leader in key industries like SaaS, digital health, e-commerce, fintech, and proptech, and is a fast-rising hub for AI," she said. At the end of the day, however, successful founders will continue their bicoastal ways, jetting off between NY and SF. "That's kind of always been the case," Boyce said, especially as New York's venture scene leans pre-seed and seed. "When these teams need $30 and $50 million checks, it's very productive to make sure to go see Sequoia and Lightspeed and NEA in SF." On the flip side, Boyce added, as SF-based consumer companies mature, they'll find themselves back on the East Coast to meet their "customer community." "It's honestly mutually beneficial," he said about the back-and-forth between the two hubs. "And something I practice myself."
Business Insider
10-06-2025
- Business
- Business Insider
AI has these founders in a New York state of mind
Move over, San Francisco. The West Coast city has long reigned supreme in tech innovation — and that's certainly been true during the AI transformation that's overtaken the industry over the last few years. But this year at New York Tech Week, the city's startup and tech community had a message to deliver: New York isn't just ready to get in on the game when it comes to AI. It's already a big player. "When it comes to New York, you have the whole spectrum to invest in. You have ecosystems, agents, and apps," said Emily Fontaine, IBM 's global head of venture capital, speaking on a panel discussion about venture capital investing in AI and quantum startups in New York on June 2. While many big AI companies like OpenAI and Anthropic are headquartered in San Francisco, OpenAI has a new NYC outpost, and the city is already a stronghold when it comes to fintech, healthtech, legal tech, and consumer startups, all of which AI innovations are transforming. These signs show the city is already in the big leagues when it comes to developing and retaining AI talent, those in the NYC tech community say. Fontaine added that not only does the NYC tech community include the entire AI tech ecosystem, but it's also home to founders and startups laser-focused on their product and working hard to get to the revenue stage — something she's excited about as an investor and that she doesn't always see when comparing AI startups in San Francisco. Fontaine said she was especially interested in New York entrepreneurs taking on AI apps, AI legal and contracts, and AI security startups. One of her co-panelists at the IBM event, president and CEO of Tech:NYC Julie Samuels, said that she was excited about AI infrastructure and AI healthcare startups coming out of New York. "People don't come to New York to live in a group house and code all night and never see anyone else," Samuels said in a nod to San Francisco's famous " Hacker Houses." She added that the New York tech community was special because people participate in various arts and culture invites unrelated to their companies. "New Yorkers hire," she said. "People want to live here, have always wanted and will continue to want to live here." Tech Week participants were similarly excited about the Big Apple's push into AI. Throughout the week, multiple event attendees told BI reporters either that they had relocated from San Francisco to New York or that they preferred NYC. "I want to make it the biggest startup ecosystem in the world," Somya Gupta, who cofounded an AI education startup Context, said of NYC. "SF, we're coming for you!" State and local governments are supporting New York's AI push. New York Gov. Kathy Hochul, at an Axios panel, announced plans to use AI to train 100,000 state employees in offices such as the DMV. Additionally, New York is building a $16.5 million AI supercomputer at the University at Albany. Many AI startups are also headquartered in New York. Affiniti, which is building AI agents that act like CFOs for small businesses, announced a $17 million Series A in May. Healthcare AI copilot Navina announced it raised $55 million in March. Legora, which uses AI to help lawyers draft and review contracts, announced it raised $80 million in May. And Series, an AI social network for young professionals, announced it landed a $3.1 pre-seed round in April.
New York Post
05-06-2025
- Business
- New York Post
Inside NYNext groundbreaking AI event at New York Tech Week
On Tuesday night as part of New York Tech Week, NYNext joined forces with Tech:NYC and PensarAI to host our first-ever event. The night celebrated the key players — from scrappy startups to giants such as Google and IBM — that are making big moves in artificial intelligence. Nearly 150 people took part in NY AI Demo Night. Founders and venture capitalists snacked on figs and tuna tartar and sipped rosé — as well as our new favorite non-alcoholic beverage Töst — at the Domino Sugar Factory in Williamsburg. The factory has gotten a major facelift and now houses a number of startups as well as a sweeping view of Manhattan. Eight AI companies presented their newest ideas to the audience with the goal of getting people to download their apps and invest in their companies 4 Julie Samuels, who runs Tech: NYC — which plays a major role in hosting Tech Week — addressed attendees. Emmy Park 'One of the most unique aspects of the NY tech scene is the ability to bring together and showcase tech heavyweights implementing AI at scale alongside startups in deep builder mode,' Caroline McKechnie, Director of Platform at Tech:NYC, told me. 'We saw a real need for an event that gives founders and engineers a window into what's being built across the city's AI landscape — all against the iconic skyline. The energy of having established players and emerging talent demo side by side is something you can only capture in a city like New York.' Reality Defender, which detects deepfakes, showed just how effective it is in finding AI-generated images among a slew of photos. Founder Ben Colman told me it would have made the plot of HBO's 'Mountainhead' — a film based on the premise that deep fakes are destroying the world — completely null. 4 More than 150 guests came to our New York Tech Week event. Tech Week has ballooned to more than 1,000 events this year. Emmy Park PromptLayer, which aims to empower lay people to create their own apps with AI, demonstrated how seamless it is for anyone to prompt AI to build a product. Founder Jared Zoneraich said, 'The best AI builders, the best prompt engineers are not machine learning engineers … they're subject matter experts.' Representatives from IBM presented their newest insights into AI. But the company also made headlines this week with its newly unveiled watsonx AI Labs in NYC. 'This isn't your typical corporate lab. watsonx AI Labs is where the best AI developers gain access to world-class engineers and resources and build new businesses and applications that will reshape AI for the enterprise,' Ritika Gunnar, General Manager, Data & AI, IBM, told me. 'By anchoring this mission in New York City, we are investing in a diverse, world‑class talent pool and a vibrant community whose innovations have long shaped the tech landscape.' 4 NYNext co-hosted the evening with PensarAI, Two Trees, and Tech: NYC. Emmy Park Other presenters included Flora, an AI tool for creatives; a podcast and newsletter network powered by AI; Superblocks, an AI platform building software; Run Loop AI, which helps companies scale coding; and Google's Deepmind. This story is part of NYNext, an indispensable insider insight into the innovations, moonshots and political chess moves that matter most to NYC's power players (and those who aspire to be). The event was just one piece of what has become a sprawling and celebratory week for anyone in technology. 4 The event was hosted in Williamsburg where the Domino Sugar Refinery has gotten a major facelift — and now houses dozens of tech startups. Emmy Park The idea for a tech week came from Andreessen Horowitz (a16z). The firm launched with a Tech Week in Los Angeles in 2022. In 2023, they expanded to San Francisco and New York City. Since the first New York Tech Week in 2023, the seven-day conference has ballooned to more than 1,000 events with 60,000 RSVPs. This year, over half of the events focused on AI. 'The energy that is in this room, the startups that we're going to hear from, these are the ideas that are going to propel New York's economy for generations to come,' Tech:NYC CEO Julie Samuels told me. 'These are the idea that are gonna change the way we all live, we all work, we all do business, we communicate. We are on the cusp of such an exciting time for New York, and tonight is just a little bit of a flavor of that.' Send NYNext a tip: nynextlydia@
