20 Leading Cities For Startups In The US

In this article, we will take a look at the 20 leading cities for startups in the US. If you want to skip our discussion on the global startup ecosystem rankings, you can go directly to the 5 Leading Cities For Startups In The US.

In recent years, the global startup landscape has observed many shifts and developments. According to reports, the leading countries for startups have remained consistent since 2021, with the USA taking the lead, followed by the UK, Israel, and Canada. Despite the uncertainties surrounding startups in 2022, these nations have demonstrated resilience, leading to stronger startup economies. A surprising development in the global startup rankings was China’s decline from 10th position in 2022 to 12th position in 2023. Capitalizing on this shift, Singapore made a jump to the 6th position worldwide, surpassing Germany. The US maintained its leadership in the startup domain and continues to lead various industries. It currently houses the highest number of startups, followed by China and the UK. This information holds significance as opting for the right location can enhance the likelihood of success by providing access to high-quality opportunities and stakeholders.

A good strategy for startup success involves establishing a business in one of the best startup cities in the world. In comparison to other areas, the North American region stands out for its consistent stability in global startup rankings, featuring numerous top-tier countries and cities for startups in 2023. Some of the leading cities for startups in the US include Austin and Chicago. Meanwhile, the European region leads globally with the highest number of cities in the top 1,000 rankings, boasting 410 cities in 2023, as opposed to 426 cities in 2022.

The startup ecosystem is likely to observe substantial growth in several industries in the coming years. The software as a service (SaaS) industry is predicted to reach a value of $716 billion by 2028. Another rapidly expanding industry in the startup landscape is Artificial Intelligence (AI), which is expected to exceed a valuation of $1.5 trillion by 2030. Since 2017, the AI blockchain industry has seen substantial growth in funding, increasing by more than 90%. Robotics closely follows suit, with funding increasing by as much as 70% during the same period. Meanwhile, Agritech and New Food startups experienced a 128% increase in funding between 2021-2022. Hellofresh SE (ETR:HFG), a German meal-kit company founded in 2011, is a notable player in this space. It is currently providing services in the US, Canada, Europe, Australia, and New Zealand. It delivers packages with all ingredients for a specific recipe to customers’ homes. The company was founded in 2011 and went public in November 2017.

As of 2023, TikTok’s parent company “ByteDance” is the world’s most valuable unicorn company. Other prominent companies that were once unicorns include Airbnb, Inc. (NASDAQ:ABNB), Meta Platforms, Inc. (NASDAQ:META), and Uber Technologies, Inc. (NYSE:UBER). You can also check out the 25 Largest VC Backed Companies In The US in 2023 here.

Here’s what Polen Capital said about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2023 investor letter:

“Uber Technologies provides ride hailing services to customers worldwide. The Company develops applications for road transportation, navigation, ride sharing, and payment processing solutions. Polen Capital originally purchased the 4.5% Senior Unsecured Notes due 2029 in our client accounts on the back of the Company’s new focus on profitability and free-cash-flow generation. Our view was that the Company’s credit metrics would improve over the next two-to-three years to levels on par with investment grade issuers. The Company’s fundamental profile has improved which resulted in spread tightening. Given the yield currently offered on the Notes, Polen Capital sold down its exposure and used the proceeds to purchase higher yielding debt instruments.”

Our Methodology

To shortlist the 20 leading cities for startups in the US, we consulted various credible sources such as Startup Savant, Startup Genome, and StartupBlink to acquire the latest information and data on the startup ecosystem. Our ranking criteria were based on StartupBlink’s 2023 global startup ecosystem report, which evaluates the startup environment of 100 countries and 1000 cities worldwide. Each city is assigned a score based on numerous factors, such as the number of accelerators, co-working spaces, startup events, investors, labor laws, and infrastructure, among others. The 20 leading cities for startups in the US have been ranked in ascending order of their total scores.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

Leading Cities for Startups In The US

20. Boulder, Colorado

Total Score = 12.20

Boulder, Colorado, has a booming venture capital scene and has seen a significant increase in venture capital funding in recent years. It is ranked as the 54th best city for startups across the globe, whereas it ranks 20th among American cities.

19. Houston, Texas

Total Score = 12.40

Houston, Texas, has a growing startup scene with a low cost of living, diverse population, and strong ties to energy and life sciences sectors. Many startups have sprung up in recent years, supported by accelerators, co-working spaces, and other resources. The city also hosts regular events like Houston Demo Day and Startup Weekend and offers resources like the Houston Technology Center’s accelerator and the SURGE Accelerator. The city has a global ranking of 52.

18. Phoenix, Arizona

Total Score = 13.19

Phoenix, Arizona, offers a supportive environment with various incubators, accelerators, and co-working spaces. It is currently ranked within the top 50 cities for startups globally and ranks 18th among American cities.

17. Minneapolis, Minnesota

Total Score = 13.78

Minneapolis has emerged as a major tech hub in the Midwest. The city has become a hub for startup activity, particularly in the health tech, insurance tech, fintech, and ed-tech sectors. The Minneapolis-Saint Paul area is considered one of the nation’s top places for entrepreneurs and startups, with a positive net migration in tech talent. It ranks 47th across the globe for its startup ecosystem.

16. Raleigh Durham, North Carolina

Total Score = 18.95

Raleigh-Durham’s tech startup ecosystem is supported by several factors, including a strong academic presence, a growing venture capital scene, and a community of entrepreneurs and innovators. The city has been recognized as one of the fastest-growing startup ecosystems in the United States. Prominent startups in the city include Fitbit, Red Hat, and Cisco. Raleigh-Durham is ranked 39th globally for its startup presence.

15. Salt Lake City – Provo Area, Utah

Total Score = 20.10

Salt Lake City is one of the best places in the US to begin your venture. Situated in Utah, which has been ranked as the No. 1 state in innovation and entrepreneurship by the US Chamber of Commerce, Salt Lake City has a thriving tech industry. It is ranked 37th globally and within the top 15 leading cities for startups in the US.

14. Philadelphia, Pennsylvania

Total Score = 22.01

Philadelphia’s startup scene is booming, particularly in the life sciences sector. The city’s ecosystem is supported by a strong talent pool. The city has seen significant venture capital activity, with a record $8.1 billion in funding in 2021. Notable startups in the city include Burro, an AI-driven agtech solution, and dbt Labs, a data analytics startup. The city is ranked 33rd globally.

13. Miami, Florida

Total Score = 22.23

Miami’s startup scene has been gaining momentum, with a significant increase in investment. The city has become a magnet for many startups and venture capital investors, driven by the rise of Web3 and crypto, along with Florida’s warm weather and accommodating tax laws. It is currently ranked as the 32nd best city for startups across the world.

12. Denver, Colorado

Total Score = 22.80

Denver is recognized as a more affordable and greener alternative to Silicon Valley, with companies like Salesforce, Google, and Facebook having offices there. The city has a strong startup ecosystem with a growing number of venture capitalists. Denver Startup Week is the biggest free networking event in North America, bringing together more than 200,000 people to participate in 359 programs. The city is ranked 31st globally in the list of the best city for startups.

11. Atlanta, Georgia

Total Score = 25.94

Atlanta’s startup scene is growing, with a focus on diversity and collaboration. Local investors, such as Zane Venture Fund founder Shila Nieves Burney and Overline co-founder Sean O’Brien, have appreciated the city’s approach to building and supporting startups. The city is ranked 28th globally.

10. Dallas-Fort Worth, Texas

Total Score = 29.26

The Dallas-Fort Worth startup scene is growing rapidly, attracting both local and global companies due to its talent pool. The city is home to a range of startups, from e-commerce to ed-tech platforms. It is ranked 26th across the globe and 10th within the US.

9. San Diego, California

Total Score = 33.15

San Diego is rapidly becoming a successful hub of entrepreneurial activity. The startup scene in San Diego is focused on the biotech, health-tech, telecommunications, and clean technology sectors. The city also hosts various startup events like San Diego Startup Week and Biocom’s Global Life Science Partnering Conference. It currently ranks 22nd across the globe and 9th in the US for its startup ecosystem.

8. Austin, Texas

Total Score = 33.44

The city of Austin is famous for its supportive environment for small businesses. Its unique culture and flourishing business community are highly attractive, prompting many new startups to settle here. Austin is among the best cities for business majors and ranks 21st globally.

7. Washington DC

Total Score = 34.20

The city is home to over 475 accelerators, incubators, and investors, providing startups with mentoring, funding opportunities, and networking resources. The city’s startup ecosystem has stages from idea generation to growth, with numerous events and programs to support entrepreneurs at each stage. It currently ranks in the top 20 startup cities in the world.

6. Chicago, Illinois

Total Score = 38.35

Chicago’s startup scene is expanding, with a strong emphasis on innovation. The city has been reported as a potential global tech leader, with a variety of companies looking to do business here. It is ranked 15th across the globe for its bustling startup ecosystem. The city is at the sixth position on our list of the 20 leading cities for startups in the US. Prominent companies such as Airbnb, Inc. (NASDAQ:ABNB), Meta Platforms, Inc. (NASDAQ:META), and Uber Technologies, Inc. (NYSE:UBER) also have operations in the city.