Silicon Valley remains at the top, while Los Angeles and Miami made notable moves up the rankings
Startup Genome, a global policy advisory and research organization for advancing startup ecosystems, just released its Global Startup Ecosystem Report 2023 that includes a ranking of the top ecosystems around the world for 2022.
Global Rankings
Rankings of the top 30 global ecosystems showed 13 are U.S. based with Silicon Valley (SV) keeping its top position. However, the emergence of other ecosystems, both globally and domestically, contributed to a reduced market share for the SV ecosystem.
The following round out the top ten global ecosystems: New York City, London, Los Angeles, Tel Aviv, Boston, Beijing, Singapore, Shanghai, and Seattle.
In aggregate the top five account for $4 trillion in Ecosystem Value, representing 53% of the accumulated total of the top 30 ecosystems. In comparison, the remaining 25 in aggregate reach a worth of $3.6 trillion. Further to this, SV accounts for 31% of the total value within the top 30 ecosystems.
Two of the most notable moves up in the global rankings were Los Angeles and Miami. The former joined the top five as #4, driven in part by an increase in exits over $50 million and over $1 billion. Most notable was a jump in the number of unicorns to 44 from 21 the prior year.
Miami moved up 10 places in just one year to #23, resulting from a 160% growth in Ecosystem Value from last year, a 64.3% increase in early-stage funding, plus large exits increasing that totaled $32.6 billion IPO.
North American Rankings
In the North America ranking of ecosystems, the top ten in rank order were: Silicon Valley, New York City, Los Angeles, Boston, Seattle, Washington, D.C., San Diego, Chicago, Miami and Austin.
In addition, the Report identifies the top five emerging North American ecosystems from first to fifth: Detroit, Research Triangle, Minneapolis, Houston and Phoenix.
While large corporations like IBM, Microsoft, Google and others maintain a presence in Detroit, its ecosystem touts 1500 plus active startups, with startup exits have growing significantly over the past five years—impacted by three $1 billion+ exits: Cybersecurity platform Duo Security and electric vehicle company Rivian and online sneaker reselling platform StockX.
The Report noted the role of the Michigan Emerging Technologies Fund that helps expand tech funding opportunities and the Michigan Business Development Program that offers economic assistance to those businesses introducing projects that are job creators or provide a net-positive return to Michigan.
Techstars Detroit Powered by JP Morgan program also is acknowledged for its virtual/hybrid accelerator that seeks to give equitable access, funding, and support to entrepreneurs who are in underrepresented groups.
Overview of the Global Startup Ecosystem Report 2023
The Report provides a comprehensive analysis of the ecosystems, drawing from data of 3.5 million startups in 290 global ecosystems.
Speaking to recent events that includes the failure of Silicon Valley Bank, JF Gauthier, Founder and CEO of Startup Genome, describes the surrounding turbulence in startup and early-stage tech funding.
Silicon Valley’s VCs and their limited partners (LPs) that account for a substantial portion of global ecosystem value, saw its Series A funding in February 2023 drop by more than 60% compared to 2022, while exits over $50 million fell 80%.
In comparison, during the period of the financial crash of 2008 to 2009, total Series A funding dropped 31%, a steep decline at that time, but now was recently and significantly surpassed.
The layoffs in U.S. based tech companies that occurred in 2022 continued into 2023, with Crunchbase estimating it to be about 135,000 workers through March. This has resulted in a drop in revenues for state governments that are now facing deficit challenges.
Both early-stage and late-stage funding have been in a correction since Q4 2021. Further, the number of exits over $50 million in 2022 was the lowest since 2013. In line with this the number of unicorns had a global decline of 40% from 2021’s 595 to just 359.
North America accounts for 45% of the world’s top ecosystems, while Europe is home to 41% of the top “emerging” ecosystems.
The Startup Genome Global Startup Ecosystem Report 2023 includes extensive analysis and may be found in full here.
