Startup ecosystems are evolving globally. In this article, we bring you the top startup cities divided as per their regions. These rankings are quite dynamic since startup ecosystems are continuously changing.
For this article, we have mainly relied on the StartupBlink Ecosystem Ranking Report which ranks over 1000 cities and 100 countries across the world according to their startup ecosystem. This is based on an algorithm that runs on tens of thousands of data points and takes into account the quantity of startup ecosystem entities (startups, coworking, accelerators, etc.), the quality of those entities, and comprehensive business environments. Other factors considered include ease of doing business and startup-friendly government policy.
We have divided our article as per the regions below and have featured top cities from each of these regions:
North American Startup Ecosystems
European Startup Ecosystems
Asian Startup Ecosystems
Latin American Startup Ecosystems
African Startup Ecosystems
Top ranked North American Startup Ecosystems
The United States is the highest ranked country globally. Canada, at 3rd position, is not very far behind. For cities Silicon Valley ranks first, boasting many successful startups that have hit the billion-dollar club. The United States will likely continue to rule the startup ecosystem due to startup-friendly policies and a huge entrepreneurial support network. Even smaller cities in the United States have many startups that continue to grow their local startup ecosystems. For more information on the ranking of the United States, see the StartupBlink Ecosystem Ranking Report.
Likewise, Canada has a multitude of successful startups and is catching up with the United States. Canada now ranks 3rd in our report. Being on the same continent and having close proximity to Silicon Valley is proving advantageous to Canada, especially since the American startup ecosystem may soon feel saturated amidst changing immigration policies. Also, the Canadian government is encouraging growth with startup-friendly policies.
Although the US and Canada are expensive places to establish startups, due largely to an active entrepreneurial community, they remain top destinations for startups. Here are the top startup hub cities in this region:
San Francisco/Silicon Valley –This area is constantly ranked at the top, and home to big names like Google, Apple, Facebook, Twitter, and many more. Because of its diverse ethnicity and technological advancement, San Francisco is declared a “Global City,” which means it has a high level of globalization. This has helped the city become a hotbed of innovation, entrepreneurial talent, and startup activity. It is also the top-ranked city that is flocked by investors, venture capitalists, accelerators, and other financial services.
New York – New York ranks 2 on our global list. What makes New York unique is the presence of large establishments and Fortune 500 companies which have eased the growth of startups. This has gradually helped startups get the best talent within the city itself. Also, it has the biggest financial headquarters of any city, Wall Street, which has helped New York become the fintech capital of the world.
Los Angeles – The land of Hollywood is also the land of many successful companies like SpaceX, Hyperloop One, Tinder, etc. In our report, LA is the 4th strongest startup hub globally but 3rd in the United States. Digital media and e-commerce are the main industries in LA.
Chicago – It’s the 8th city on our list, and boasts startups like Basecamp and Groupon. Chicago has been a growing startup hub because of its innovative culture and the presence of many universities. Chicago also ranks high from a profitability perspective since investors are able to see good returns.
Toronto – Toronto ranks 15th globally and bags the top spot within Canada. It is also the financial capital of Canada, which helps startups get financed more easily. Additionally, Toronto has several top-ranked universities, like the University of Toronto, to help provide the needed talent. Coupled with the fact that Canada has been moving to more immigration-friendly policies, Toronto has become a bustling startup hub.
Vancouver – While its high prices may seem like a deterrent for startups, Vancouver has hatched impressive companies like Slack and Hootsuite. It is the 2nd most popular startup hub in Canada and 25th globally on our rankings. Tech talent is also rising in the city, as are VCs and investors.
Top-ranked European and UK Startup Ecosystems
Europe continues to remain a big startup magnet, partially due to the locational proximity to both Asia and America. Europe has been a major trade center in the past and is now seeing heavy startup activity. Language barriers are an issue for most European countries, but still, there are many startups catering to local populations. Startups that are geared to a global audience are limited to English speaking countries or to major tech hubs like Berlin and London.
As per our report, Europe is home to 18 of the top 30 countries on the global startup list. This is a big number, and more European countries are beginning to create startup-friendly policies. Europe has also seen a growth of big VC firms and investors over the past decade.
London and Dublin continue to lead the way and are the main financial hubs in Europe. Amidst confusion regarding Brexit, many global corporations are shifting their base or trying to create another base in the EU region in cities like Paris, Berlin, and Amsterdam.
London – Language not being a barrier, London established itself as a top finance hub generations ago. Gradually, there has been an increase in tech startups in the city too. London ranks 3rd in our list, after San Francisco and New York, However, in the UK, London is the only city in the top 50 cities globally that boasts of startups. That shows how and although London is a strong startup hub, rest of the UK lags way behind in attracting and retaining startups.
Tel Aviv – While still in Asia, we feel Tel Aviv best competes with European startup hubs and is a powerhouse for innovation and tech. As a result, it ranks high on our startup ecosystem list at the 6th spot. The Israeli government has implemented several measures to support and grow startups since the 1980s, a very important factor in why Tel Aviv ranks high. Google, Intel, and Microsoft are some of the corporations that have headquarters in Tel Aviv. Many startup founders flock to Tel Aviv because of the ease it offers in setting up startups and its huge network of entrepreneurs.
Berlin – Berlin occupies the coveted 7th spot in our rankings. Despite being in Germany, there is not much of a language barrier. Germany is known as a tech country with many good educational institutions, beneficial to Berlin because tech, automobile, biosciences, and medicine rule the startup world. In the EU, Berlin is the biggest startup hub; ResearchGate and Babble are a few of the successful companies established here. Rocket Internet, is a very large incubator, is also established in Berlin.
Paris – Paris is on the 12th spot globally, and while France has created many startup-friendly policies in recent times, the language barrier may remain as one of the strongest issues deterring Paris from entering the top 5. In 2017, Station F was inaugurated, which is a startup incubator turned startup campus with a coworking space. There is also the presence of many Fortune 500 companies in Paris.
Stockholm – Ranking at 24, Stockholm claims business names like Skype, Spotify, SoundCloud, King (Candy Crush), Mojang (Minecraft) and TrueCaller. It has become a hub for tech, music, and gaming startups. Stockholm also holds the 2nd highest unicorns per capita, after Silicon Valley. Investment in Stockholm startups has also increased every year.
Barcelona – At 27th position, Barcelona has not only startups but also several accelerators and coworking chains. Compared to other global startup hubs, Barcelona is relatively inexpensive and hence easier for startups to set up. Uniquely, Barcelona also offers a great quality of life which is one reason why startups choose this city. Some successful companies begun in Barcelona are Typeform, Softonic, and Glovo.
Top ranked Asian Startup Ecosystems
Asia has few large startup hubs but also many small ones that are extensively expanding. India and China lead in Asian nations as top startup destinations flocked by several large investment funds. Total investments in these 2 countries account for nearly 70% of investments made in the United States.
Tech remains the top industry for startups in Asia and there is an abundance of young talent. Also, there is a healthy mix of Asian startups are geared for global markets as well as local markets.
Beijing – This is the top startup hub in China and 17th on our list globally. In China, Beijing ranks at the first position that has the maximum startups within Asia. It has several high profile startups that have gone to become corporations like Baidu, WeChat, Didi, Xiaomi and has become a tech hub especially focussing on AI. Most of China’s unicorns are located in Beijing apart from many coworking chains, investors, accelerators and more. The added advantage for Beijing is the relatively closer proximity to Shenzhen which is the biggest manufacturing hub in the world. Beijing is sure to rise in the startup ecosystem ranking.
Bangalore – Bangalore ranks 11th on our startup ecosystem report and is the biggest startup hub in India. Apart from the many tech startups present in the city, it also has several coworking spaces, incubators and investors. Successful startups like Flipkart, Ola, Wipro, Infosys started in Bangalore. Since the 2000s, the state government has put in many policies for the entrepreneurial and startup community. Many global corporations have their headquarters in the city as well. Several annual conferences like NASSCOM’s Nation Product Conclave further boost and support the startup scene.
Shanghai – Shanghai is at 31 globally and 3rdd within China after Hong Kong. While pure tech startups choose Beijing, Shanghai leads in other startups geared not focussed solely on tech. However, like Beijing, closer proximity to Shenzhen definitely helps the startup community especially hardware and IoT startups.
New Delhi – New Delhi is next on our rankings at 18. In India, it takes the 2nd spot after Bangalore. While Bangalore bags the limelight with many successful startups, Delhi makes its mark with stories like Zomato, Delhivery, etc. Slowly but steadily, investors are becoming more serious about startups based out of Delhi and Noida and the startup scene is maturing.
Top ranked Latin American Startup Ecosystems
Late to arrive on the startup bandwagon are the Latin American countries, but they are growing their startup ecosystems backed by tremendous government support. One good thing about the startups developing in this region is that they tend to focus on local problems that have plagued them since decades like agriculture, education, and climate change. This is also helpful since they are geared to local markets since there are very few English speaking countries.
Global startups from Latin America have yet to reach their full potential but are gradually making progress since local markets offer limited possibilities. Being closer to the United States, investors and VCs are also taking more interest in Latin American countries like Brazil, Chile, Argentina, and Mexico. But overall, most Latin American countries are still plagued by bureaucracy, corruption, and instability and these issues must be addressed before real progress can be made on improving startup ecosystems.
São Paulo – Ranking at 23, São Paulo is at 1st position in amongst all Latin American cities. Being the 8th largest economy, Brazil is still lagging behind to achieve its full potential. São Paulo is the only Brazilian city to have ranked in top 50 cities globally. While the number of unicorns from São Paulo is less, it is gradually moving towards having several successful startups relocate to the United States to cater to global markets.
Buenos Aires – At 48, Buenos Aires is establishing a tech startup scene. The Argentinian government has launched several initiatives to promote the growth of startups. In 2017, a new policy was created that allowed newer businesses to open in 24 hours instead of 24 days. Buenos Aires also boasts a dedicated “distrito tecnológico,” or tech district, where most startups are located.
Santiago – Santiago ranks 59, and while it just misses the top 50 list, the strength of Santiago’s startup ecosystem is building. The Chilean government has implemented several initiatives in the recent past to boost its startup ecosystem. For example, Startup Chile in Santiago boasts 1300 new startups. Since Santiago houses more than 90% of all the startup activity within Chile and the city enjoys increasing government support, look for Santiago to make the top 50 list soon.
Next up on the Startup Ecosystem map are the African cities. In Africa, Startups have only seen a boom over the past few years, compared to other areas of the world where startup activity has been high for years. Many African startups also lack capital or the presence of major VC firms and other investors.
Many African countries are now passing laws to encourage startups. For example, Tunisia just recently passed a Startup Act. While none of the cities in Africa rank in top 100 as startup hubs, South Africa leads the way with Cape Town being in top 150 cities globally. While most other African cities are still modernizing, South Africa, Kenya, and Nigeria are leading the startup race.
The African subcontinent is dealing with several serious issues, like not having proper infrastructure, a lack of medical aid, and ongoing political challenges. These hinder the growth of a healthy startup ecosystem. Like Latin America, most African startups are more focused on solving issues in local markets than catering to global markets.
Lagos – Lagos stands at 99 and while still lagging behind Cape Town and Nairobi, the Lagos startup ecosystem is fast catching up. The biggest challenge Nigeria faces is internet connectivity and infrastructure limitations. Once steps are taken to overcome these issues, the startup scene in Lagos will improve overnight.
Nairobi – The only other African city in the top 200 is Nairobi at 105. Kenya is seeing a lot of innovation in recent years due to the development of mobile money, which has been nothing less than revolutionary in the country and across the continent. Mpesa, their mobile money system, has gained huge traction throughout Africa and has improved ease of access nearly everywhere.
Cape Town – Cape Town ranks at 157th position globally but first on the African subcontinent, leading other African cities by a large margin. Several tech startups are growing in Cape Town, and the Silicon Cape Initiative was launched in 2009 to help grow the local startup ecosystem.
Other interesting startup ecosystems on the list
The above list is not exhaustive, and there are many other interesting startup ecosystems we are tracking that have seen a lot of improvement in the last few years. Many are receiving significant government support, improved public activity, and/or and investor interest that will help grow these ecosystems tremendously in the near future.
Some of these are:
Kingston, Calgary and Halifax (Canada) – These 3 cities are improving their startup ecosystem, and each is also backed by strong government initiatives; for instance, Halifax has received $2 million to improve tech in the city. In Kingston, there are several independent startup agencies, like Innovate Kingston and Startup Kingston, helping to promote startup activity. Likewise, Calgary has Startup Calgary providing support to startups. Unlike the United States, the Canadian government has been working recently to ease immigration policies and help bring in more talent.
Lisbon and Porto (Portugal) – Portugal is hungry for startups, and the Portuguese government has several initiatives like StartUP Portugal for encouraging entrepreneurship. Portugal is climbing our startup ecosystem rankings, and now boasts 2 main cities, Lisbon and Porto, each a hub for innovation and tech. Encouraging the startup scene further, the Web Summit, an annual global tech conference, was moved from Dublin to Lisbon in 2016. In Porto, there is Porto Digital Association, a government-backed body that aims to promote ICT projects in Porto.
Helsinki and Tampere (Finland) – Finland is another country doing well on the strength of its startup ecosystem. The Finnish government has offered strong backing for the startup and entrepreneurial community through the launch of the Startup Residence Permit in 2018, enabling entrepreneurs starting a business in Finland to quickly get a residence permit. Helsinki has the annual Slush event for startups, and the Helsinki Business Hub to help startups in the fields of ICT, Healthcare, Smart cities, Smart maritime, and Investor relations. Tampere has Business Tampere and the Tampere Startup Hub, both of which are involved in tech and startup growth, as well as two universities and two polytechnic institutions which help generate great talent.
Munich and Nuremberg (Bavaria region/Germany) – Munich ranks 2nd in Germany after Berlin for its startup ecosystem. The whole Bavaria region comprised of Munich and Nuremberg is startup rich. It is also a strong economic zone. The German government is already leading in creating startup-friendly policies, which helps not just Berlin, but also the entire Bavaria region. Munich is already known for its manufacturing, automobiles, and engineering, and is now expanding its entrepreneurial culture. Nuremberg started climbing the startup ladder with the launch of Zollhof, a tech, and digital incubator, in 2017.