NEW YORK - New York passed Massachusetts in US venture-capital deals for the first time since at least 1999, ranking second in the latest quarter behind California, as investors seek growth in consumer Internet start-ups.
New York companies took in $831 million in 86 venture capital deals, compared with $710 million for 83 investments in Massachusetts, according to a report released yesterday by CB Insights, a venture capital database.
A total of 790 US firms received $7.9 billion in the fourth straight quarter of venture investment growth.
“A lot of people have worked hard at building a start-up ecosystem in New York City for more than a decade, and in the past few years you’ve seen it take hold,’’ said Jerry Neumann, who has invested in technology companies in the city for about 15 years. “They’re coming here out of necessity.’’
“Incubators’’ for entrepreneurs have opened in New York City, and venture investors from Silicon Valley and Boston have shown interest in the area, attracted by start-ups like FourSquare Labs Inc. and Gilt Groupe Inc. Support for entrepreneurs from investors and from city government is growing, making the trend likely to stick, said Neumann, whose firm is NeuVC.
Internet start-ups accounted for almost two-thirds of the deals and venture financing invested in New York companies, the data show. The biggest rounds went to Tumblr Inc., a blog site; ZocDoc Inc., which allows people to book medical appointments online; and Buddy Media Inc., which provides social-media marketing software.
“There was never a ton of consumer Internet in Boston, and a lot of that is happening in New York,’’ said Ian Sigalow, a partner at New York-based Greycroft Partners LLC, an investor in Buddy Media.
In recent years, Silicon Valley firms including Accel Partners and Canaan Partners have opened offices in New York. Greycroft has raised $205 million in two funds and has invested in 57 start-ups, 18 of them in New York, Sigalow said.
“If you were on the Delta Shuttle six years ago, it used to be New York-based bankers going to Boston to do private placement for clients,’’ Sigalow said. “Now it is Boston venture capitalists coming down to meet New York-based start-ups.’’
California companies still dominate in venture capital, with $3.83 billion in 315 deals in the latest quarter. That is 40 percent of total US venture investments, the data show.