New York City was an initial U.S. hotspot for the COVID-19 pandemic, and it’s also one of the most expensive cities in the world — so you might think startups would be anxious to leave.

However, when we surveyed a number of New York-based venture capitalists, they seemed bullish about the city’s future as a startup and technology hub. As AF Ventures’ David Levinson put it, “New York simply has too much to offer, from its richly diverse population, cultural significance and vast collection of industries to lose its entrepreneurial spirit.”

Lest you think this is just reflexive NYC boosting, several of our respondents offered stats and historical analyses to back up their arguments. They also discussed industries that are likely to flourish and how the shift to remote work will affect local startups.

Here’s who we interviewed:

Keep in mind that if you’re on the hunt for an investor, several of these VCs are industry specific, which they note in their answers.

Jessica Lin, Work-Bench

How much is local investing a focus for you now?

Very much so – we continue to be extremely bullish on investments in enterprise tech in NYC with over 70% of our Work-Bench portfolio is based in the city. Since 2014, there has been over $10 billion of venture funding towards enterprise startups alone, and that number is only growing. We believe the next generation of enterprise tech giants will come out of NYC, given its density of Fortune 500 customers. Regardless of COVID-19, building next to your customers is always an incredible advantage.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Our Work-Bench enterprise startups based in NYC moved quickly to work from home and have made the best of the situation.

If anything, many of our enterprise startups have been relatively resilient during today’s economic shifts. So far, we’ve seen the Fortune 500 demonstrate an increased need and adoption for improved technology areas such as software to improve developer collaboration and productivity, or intelligent process automation.

Additionally, many enterprise startups were already poised with the tools and capabilities to work from home. While many of us live in small, city apartments and miss the office space and socialization, transitioning at-home was relatively easy compared to other industries with higher in-person demands.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Building a hub for all things enterprise tech in NYC has been a part of our core mission since starting Work-Bench 6+ years ago, and hosting up to 200 events a year.

We feel fortunate to have been able to transition these events online. Our NY Enterprise Tech Meetup continues to have 250+ attendees per month, and if anything, it’s enabled our community to grow globally – with attendees dialing in from the West Coast, Canada, UK, Israel, and more.

We believe the NYC enterprise ecosystem will adapt and ultimately come out stronger.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

While consumer sectors are getting hit hard, we’re actually seeing increased demand for offerings from enterprise startups.

Fortune 500 companies need new technologies and capabilities more than ever, given that many legacy tech incumbents can no longer meet most of their needs. In our portfolio, we’re seeing pull in many areas including everything from automation for document extraction, to platforms that support with managing incidents and software reliability, to customer success software to assess customer health and reduce churn, and precision mental healthcare benefits to support employees in these trying times.

Here are a few examples of our portfolio companies seeing uptick in Fortune 500 customer demand due to COVID-19 and the new priorities coming out of the pandemic:

  • FireHydrant is an incident response platform helping with service reliability which is especially important given increased infrastructure demands during COVID-19
  • Spring Health is a precision mental health benefit platform, which was already seeing growth from mental health issues in our country, and unfortunately COVID-19 has exacerbated the problem
  • Catalyst is a modern platform for Customer Success and is needed to help companies retain existing customers
  • Arthur is a model monitoring solution, which is needed given the heterogeneous ML environments in Fortune 500 companies and the increased scrutiny for what’s operating in production given the rapidly changing world, and therefore underlying assumptions in models, right now

Any other thoughts you want to share with TechCrunch readers?

NYC is one of the most diverse cities in the country. We have witnessed incredible change not only over the past few months, but also the past few weeks. My hope is that investors (including ourselves at Work-Bench) hold themselves accountable to better promote diversity within our own industry to bring about long-awaited and lasting change.

Alexa von Tobel, Inspired Capital

How much is local investing a focus for you now?

Inspired is based in NYC, and while we invest across the country, we are incredibly passionate about partnering with companies rooted here. Our team has personally founded companies in New York; I started LearnVest here and my partner Lucy Deland started Paperless Post. When we launched Inspired last year, we did so with the goal of supporting early-stage companies in our own NYC ecosystem. And for portfolio companies outside of New York, we’ve found that being here is an advantage, as we can be an on-the-ground resource on the east coast.

We have definitely seen the momentum of NY startups continue over the past few months and have met with many great local founders over Zoom.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

The challenges startups are facing in New York are quite similar to those startups are facing across the country—they’ve had to make a rapid shift toward fully distributed teams and face a new economic climate.

In New York, it was clear early on how serious COVID would be, and I think that forced New York startups to adjust quickly. We moved as fast as possible to share guidance with our portfolio—my partner Penny Pritzker and I started by hosting a webinar in March to share our advice for leading companies through an economic downturn. We’ve seen our portfolio companies stay nimble, like Rho, the small business bank which quickly started helping its customers in obtaining PPP loans, and Chief, the vetted women’s network, which expanded its digital programming.

Much like on the west coast, we’re facing a long road before we’re back in the office, so all NY startups will need to figure out how to keep making progress with teams that are staying at home.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Absolutely. I’ve seen NYC grow into the powerful startup hub it’s become over the last decade, and I think that momentum will continue. Now that we’ve learned high productivity is indeed possible remotely, we expect to see companies maintain some element of a remote workforce within their broad hiring plans. But for startups in their earliest stages, I think there’s still a power to sitting side by side as you build a business. When founders are making their first hires and inking their first deals, NYC remains an incredible place to do that.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

I started LearnVest in New York because this city has long been the center of finance. Layer on the fact that New York’s startup infrastructure has grown tremendously, and I think New York remains a great place to start a company. Fintech companies will continue to thrive here, and I also am keeping a close eye on local innovation across restaurant and food tech, healthtech, and the next generation of social platforms.

Any other thoughts you want to share with TechCrunch readers?

While this is an unprecedented moment economically, we believe there are massive opportunities for new innovation to develop right now. For early-stage companies, this is a great time to be heads-down and building toward your bigger vision. One silver lining to these recent challenges is that founders who display true grit and perseverance stand out. Those are qualities synonymous with New York founders, and I’m excited to partner with the next generation of “recession entrepreneurs.”

Eric Hippeau, Lerer Hippeau

How much is local investing a focus for you now?

We are NY-first investors and the most active VC firm in the city. Local investing has always been our priority, and it is more so now than ever before given the pandemic’s impact on New York. However, we make a large number of investments outside of New York, particularly if our extensive NY network can be useful to the company.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Some categories are performing well during this period, and others have been hit hard. Companies have had to rethink roles, benefits, office space, communication and KPIs, which is easier for early-stage companies to some degree than larger organizations. Companies that entered this period strong will come out stronger and those who were struggling will feel the impact the most. This is true for New York and elsewhere.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

New York is resilient and will come back stronger than ever, but it will take some time. The most innovative businesses are often started in a downturn. These periods shine a light on systematic gaps and key problems that fuel creative solutions and entrepreneurism.

Remote working is a trend that will continue to be integrated into every business as appropriate once offices begin to reopen. Businesses are looking to make up for losses they’ve experienced, so we’ll see many companies rethink their physical office space needs and rely even more heavily on digital resources for employees to work effectively. New York excels at software, so we expect to see innovation in remote working, learning and healthcare software continue to accelerate.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

Healthcare technology and telemedicine have done well as they have become a necessity. COVID-19 has also shed a light on where there are gaps in health care. We’ve seen our New York-based health care investments including K Health, Medly and Klara step up in a real way to address patient needs during this time — be it telemedicine, on-demand prescription delivery or doctor-patient communication. We expect to see new innovations in healthtech emerge with New York as a hotspot.

On-demand fitness is another industry that’s seeing a boost. There was a rising popularity for at-home, on-demand fitness services before the crisis, and COVID-19 has accelerated the industry’s mass appeal. Mirror, one of our investments, is one example. Peloton is another that’s clearly benefiting. And ClassPass has adapted as well. All are New York companies.

Remote working and learning software have been essential, and we should expect these businesses to continue to have strong performance as they’re more universally adopted. Companies of all sizes need software collaboration tools in place to support their changing workforce. Air, which is workplace collaboration software for creative teams and one of our more recent investments, is well-positioned to address that need. I expect to see new innovations emerge as New York figures out how to get back to work in the months to come.

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