The greatest start-up hub in the world is the Silicon Valley and has been at the forefront of innovation, technology, talent, capital, entrepreneurship etc. since a long time. Its difficult to imagine a scenario where the start-up capital of the world gets dethroned by another city. While this scenario looks difficult, its not the least improbable. There has been a spurt of cities across the globe that have caught on to the ethos and the DNA of Silicon Valley and have been making rapid strides in this regard. Mainstream cities like New York, London, Shanghai, Singapore ride along side the new fast-emerging cities like Tel-Aviv, Toronto, Bangalore and Berlin to name a few.
There have been numerous reports, studies, analysis and publications around the rankings of the start-up hubs and while all of them them differ in their rankings, the set of cities more or less are the same, especially for the ones that are leading the pack.
We looked into the the list published by start-up experts and organizations and based on frequency of the listing of the cities, we arrived at the list. The rankings will seek to provide readers with a list of start-up that are leading the race and in no way seeks to justify their ranks. For e.g New York, London and Tel-Aviv are regularly featured in the top 10 start-up hubs of the world but their rankings vary from publication to publications. What we would gather at the very outset is that the aforementioned cities, alongside Silicon Valley, rank to be the among the best start-up hubs in the world and consistently make it to the top of the list of all major publications and studies.
1.The Silicon Valley
Silicon Valley has been the centre of innovation, technology, entrepreneurship, talent, capital and network effects. There is a flourishing marketplace and adequate infrastructure for any start-ups to succeed. The valley is also home to the second largest number of unicorns (55) second only to Beijing (82) as per a 2019 report by Statista. The valley has the largest concentration of tech companies and tech workers with the highest average salary for tech workers. The valley beckons technocrats from all over the world with a sheer promise for success and wealth creation.
2. New York
New York has fast emerged as one of the most promising start-up hubs in the world but trails behind Silicon valley by a huge margin. The number of unicorns in NY is 55 as per data from Statista coming in 4th overall globally. This is still less than half of the unicorns in Silicon Valley. NY however has successfully overtaken Boston to be in this rank and the reason have been primarily attributed to emphasis on digital technology, digital transformation, a surge in capital inflows and the success of the start-up accelerators with a strong political will.
What Silicon Valley is to the world, London is to Europe. Not considering the fall-out of Brexit, its perhaps the only European City, to have cemented its place as the Financial and the Tech Hub of the world. To put things into perspective, as per startupsoflondon.com, the start-up ecosystem is valued at $90 billion with VC investment up from $8.2 billion in 2018 to $13.2 billion in 2019. As per Startupgenome, London has a huge potential in the edtech business with more than 500 of such companies doing business. In many ways, London is similar to New York in teams of diversity and exchanges of ideas, culture and talent from across the world and this will play a significant role for the city in the times to come.
Having conceded to New York in recent times, Boston still remains one of the best start-up hubs currently. One of the most important competitive advantage being access to world class talent from institutions like Harvard and MIT. As per thenextweb.com, the government and the authorities have taken a lot of proactive steps to infuse tax rebates and grants for early stage start-ups especially in the areas of clean-tech and life sciences. In addition, Boston has a plethora of tech giants and has seen tremendous growth in areas around robotics and advanced manufacturing coupled with a strong political, Boston will continue inspiring in the years to come but stand to bear stiff competition from the other players that are relentless to make their mark.
5. Tel Aviv
The Tech Capital of Israel has made a stupendous impact in cementing Israel’s technology and innovation prowess. Leaders refer Tel-Aviv as the start-up capital of a start-up nation and indeed, Tel Aviv has been the engine of this phenomenal growth. The city has made a mark for itself in the realm of cyber-security, AI, Big Data and Analytics and ranks third globally in AI start-ups. Tel Aviv is also the hub for cultural, student, gastronomical and tourist exchange giving it a global outlook and recognition.
The Startup Genome values the start-up ecosystem of Tel -Aviv at $47 billion and has the distinction of having the highest number of start-ups per capita in the world, that’s one start-up for every 1400 people, trailing behind the leader of the pack, Silicon Valley. The concept of tech-tourism has also played a huge role in building permanency to the innovation going on in this “start-up nation”
6. Los Angeles
The City of Angels known for its ethnic diversity, Hollywood and the Mediterranean climate is home to the “Silicon Beach”- an area on L.A home to more than 500 tech companies including start-ups. Some of the prominent seeded start-ups include Tinder and Snapchat. Other prominent companies based out of the “beach” include Honey which was acquired by Paypal for $4 billion in 2020, Oculus VR which was acquired by Facebook for $2 billion in 2014, Scopely and TrueCar. This gives a total start-up ecosystem value of $120 billion as per startup genome
The major areas of investment include robotics, virtual reality, gaming, mobility, social media etc. The VC capital infusion in LA based start-ups have seen a growth rate of 38% compounded annually. The other propeller to the growth is the taxation relief provided to LA businesses to the tune of $90 million since 2013 as per an article on LA start-ups.
No country in the world has shown progress like China in the last 2 decades or so and Beijing is closing in on Silicon Valley. The success of Beijing as a start-up hub can be gauged by sheer numbers. The Start-up Genome values the ecosystem at a staggering $345 billion though its half of the value for Silicon Valley. As per Statista, Beijing has 82 unicorns, the highest number worldwide and China hold the record of the highest number of Unicorns, 206, worldwide.
One of the most compelling reasons for Beijing’s rise to stardom is the affiliation of the incubators and accelerators to the universities for eg. Innoway, a government backed start-up village is surrounded by the top universities in Beijing and had successfully incubated 2900 start-ups, raised a total of $1.36 billion with a 36% success rate based on funding. It will be interesting to see how this city will progress in the years to come.
Seattle has the unique distinction of being the home to some of the biggest names in business such as Microsoft, Amazon, Starbucks, Boeing etc. As per The Start-up Genome, $30 billion is the value of the Start-up ecosystem in Seattle with AI, Big Data, Analytics and Life Sciences paving the future opportunities for the city.
As per reports, Seattle has secured $3.5 billion as VC funding in the year 2019 up by 20% compared to 2018. There were more than 7 deals in excess of $100 million. While this figure pales in front of other start-up hubs, the latest influx is an indication of more to come.From a talent perspective, Seattle was ranked 5th overall in terms of job creations between 2018 and 2019. The presence of giants other than mentioned before eg, Facebook, Tableau, Google, Twitter, Salesforce, Splunk, Apple etc will surely provide the base for setting up more start-ups in the future
Shanghai has home to about 47 unicorns as per 2019 data and the number will only go higher. With the value of its start-up ecosystem pegged at $138 billion and the city now ranked number 2 in the gaming industry worldwide and expected to breach the $15 billion mark by 2020, it is on a rapid growth trajectory. The city alone boast of more than 130 gaming start-ups serving heavy weights like Ubisoft, EA and hosts ChinaJoy, Asia’s largest gaming expo.
On the talent side, the city boast of 22% of its founders being women when the industry average is 17.2% as per RadiiChina.
Apart from gaming, the EdTech companies is the other growth engine. The city boasts of more than 1000 edtech companies and have been adequately funded from VCs. The Shanghai government has also played a huge role in creating funding avenues while the incubator and accelerator programs continue to deliver the required support
One of the reasons we don’t know about Moscow is because the information we seek are available in Russian social media platforms like VKontakte and Odnoklassniki. However there has been a lot of ground covered and this year Startupblink has rated Moscow to be in the top 10 of its list while it separately aims to be in the top 3 by 2030. As per data published by iltellinews , there were around 4500 start-ups in Moscow alone in the year 2019, 35 technoparks for hi-tech and creative companies along with a dedicated citywide center for Digital Business Spaces.
There is also a healthy number of accelerators backed by the government and private entities that have significantly contributed to the rise of Moscow alongside the additional accelerators programs launched by the local universities.
In terms of innovation, as per the HSE Global Cities Innovation Index 2020, Moscow ranks eighth among cities in the world in terms of innovative attractiveness ahead of Seoul, Singapore and Shanghai.
The list has been confined to the top 10 of the start-up hubs however its worth-while to note that there are cities like Amsterdam, Paris, Chicago, Berlin, Singapore, Toronto, Austin that look to be strong contenders to find a place in the list in the years to come.
- Top Startup Ecosystems in 2020: Ranking 1,000 Cities and 100 Countries – Crunchbase
- Startup Genome
- The Best Startup Cities 2020 – StartupBlink Blog
- The 20 hottest startup hubs in the world | BusinessInsider India
- The Top Ten Startup Cities To Watch Out in 2020 – Top Startup Cities
- Global Map of Startups & Ecosystem Rankings | StartupBlink