Why the CEO of $54 billion Twilio is staying in San Francisco amid a recent exodus of Silicon Valley elites (TWLO)

Twilio co-founder and CEO Jeff Lawson

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While several prominent Silicon Valley companies, CEOs, and investors have departed the San Francisco Bay Area for places like Texas and Florida, Twilio CEO Jeff Lawson said he’s committed to staying. 

The CEOs of Splunk, Dropbox, and Brex, as well as Oracle cofounder and executive chairman Larry Ellison, have all recently packed their bags. VCs Keith Rabois of Founders Fund, Ben Ling of Bling Capital, Joe Lonsdale of 8VC, and J.D. Ross of Atomic are also ditching the Bay

Participants in the exodus have cited frustrations the Bay Area’s high taxes, high crime rates, and liberal political culture, while touting the warm weather and low costs of living in Austin, Texas or Miami, Florida, which have both become popular locales for fleeing techies. Execs aren’t just moving their own homes, they’re moving their company headquarters: Longtime Silicon Valley companies Oracle, Hewlett-Packard Enterprise, and Dropbox are relocating their headquarters to Texas. 

However, Lawson says he plans to stay put in San Francisco — and won’t move $54 billion Twilio, either. 

His reasoning is straightforward: San Francisco is “our community,” he told Insider. 

“I think now is a time for the technology industry to invest in communities and society at large,” Lawson added. “This is a generational pandemic — and economic impact — that is affecting our society negatively.”

He says he wants Twilio to be part of the community, rather than having an “us versus them” mentality. 

“I don’t think it’s a time to be bailing on our communities and complaining at the same time,” Lawson added. “It’s an opportunity to be good neighbors.”

Lonsdale tweeted that Austin is “far more tolerant of ideological diversity” than San Francisco, while Rabois said, “San Francisco is just so massively improperly run and managed” that “it’s impossible to stay here.” 

Twilio’s business has fared well during the pandemic and customers found its products particularly relevant during the pandemic, Lawson says. Indeed, Twilio’s stock has more than tripled in 2020.

Read more: Twilio salaries revealed: Here’s how much engineers, product managers, and more make at the $51 billion cloud communications company that’s skyrocketed amid the pandemic

That puts it in a position that allows it to help communities that aren’t faring as well, he said. For example, the company has provided product donations, discounts, grant funding, and technical resources to help other organizations respond to the coronavirus pandemic. 

“It’s not just about San Francisco,” Lawson said. “We are a global company. Everywhere we do business, we want our teams to invest in their community.”

Got a tip? Contact this reporter via email at [email protected], Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request.

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Some VCs are saying San Francisco is over. Now they have the numbers to back that up.

Summary List PlacementSome VCs have been declaring that San Francisco is over, and now they have the numbers to prove it.
Despite record-breaking investment in the venture capital industry, the Bay Area saw a sharp decline in angel and seed deals in 2020, according to a report by Pitchbook and the National Venture Capital Association.
In 2020, San Francisco reached only 81.2% of the angel and seed deals it made in 2019. Although it still had more deals than any other city, it recorded a “a 10-year low in proportion of total deal count.” This means, compared to other major cities, San Francisco was less dominant than it’s been in the last decade.
It’s easy to attribute this to the pandemic; however, the venture capital industry managed to invest over $150 billion this year for the first time ever. VCs weren’t necessarily investing less — this newly-remote world just gave other cities a better chance to get in on the action. 
Read more: Venture capital had a record-breaking 2020: $150 billion in deals, all-time highs for fundraising and results
This could be a told-you-so moment for VCs who have been championing an end to Silicon Valley’s dominance in the startup world. 
Founders Fund general partner Keith Rabois has been vocal about his move to Miami, insisting other VCs are doing the same.  
“There are lots of people that have already moved that haven’t been written about that are pretty high profile,” Rabois told Insider, although he declined to say who. “Post-COVID, I think the concentration of talent has atrophied, perhaps permanently.”
Similarly, prominent VCs like Palantir co-founder Joe Lonsdale left San Francisco and Opendoor co-founder J.D. Ross left the Bay Area for Austin, among a long list of other tech elites who went to other cities. Investors have cited San Francisco’s taxes, tiny apartments, and homelessness issue as reasons for their departure.
Of course, Silicon Valley has been pronounced dead before, and it’s managed to come back swinging. The city has been subject to many tech booms and busts over the decades and the pandemic may have simply ushered in another bust cycle.
“Everyone either thinks San Francisco is the center of the universe or it’s dead,” venture capitalist Ann Miura-Ko told tech journalist Eric Newcomer in his newsletter. “It’s just super annoying because anyone who has been here for over one cycle knows it always comes back and it always also falls out of favor.”
It’s also worth noting the majority of deals were still made in the Bay Area, with a total of 2,503 completed deals. This was miles ahead of second place: the New York area with 1,500 deals. 
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A remote world, however, has certainly given other areas of the country a chance to thrive. Atlanta saw a 13.1% increase in angel and seed deals over 2019, completing nearly 100 angel and seed deals for the first time in over half a decade. Atlanta has been up-and-coming for awhile, landing at number eight on our list of cities outside of Silicon Valley to start your business, and launching startups like MailChimp and Kabbage.
Boston was the only other major city to show an increase in deals. Meanwhile, New York City, Chicago, and Los Angeles all experienced a decrease in deals — albeit not as drastic a drop as San Francisco. 
Still, the report said we may be seeing the start of a long-term trend away from the Bay Area for startups, heralding 2020 as a “harbinger for investment trends to shift further outside of the region’s venture hub.” 

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Summary List PlacementThe global digital health sector has unsurprisingly boomed amid the ravages of the coronavirus pandemic, with companies and consumers increasingly seeking out alternatives to in-person services.
Investors too are pouring more money into the space. One recent beneficiary is Hinge Health, which raised $300 million earlier in January to become the most highly valued private healthtech in the US, the company said. 
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The startup, founded in 2015, avoided layoffs or salary cuts and continued to hire last year. This new fundraising will help Hinge Health continue on its growth trajectory, with its current 550 headcount likely to double by the end of 2021, Perez said. The company was named as a healthtech company changing the industry recently.
Amid a crazy year for IPO listings in the US, and a likely continued surge into 2021, Hinge Health is primed for a debut on the public markets. 
“There was enormous investor interest when we opened the round — within 24 hours we had more than $400 million in commitments,” Perez added. “They [Coatue and Tiger Global] are the two best funds for a pre-IPO round, it’s very rare that they co-lead the same round.”
The two private equity firms’ involvement continues a trend of major hedge funds and private equity piling into late stage startups. 
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“There is no pressure to IPO soon,” said Perez. “We’re hoping to be in a position to go public, or whatever, in 2022.”
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