Startup Genome has been tracking the growth of startup ecosystems around the globe since 2012.
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It ranks the top ecosystems by a number of metrics including performance, funding, connectedness, talent and knowledge.
The top five are the same with some movement between them. Silicon Valley is at the No. 1 position. New York remains at No. 2, now newly tied with London. Beijing is at No. 4, and Boston is No. 5. Tel Aviv and Los Angeles tied at No. 6.
“Given an abundance of capital and investment, and being a magnet for global talent, London has risen to its current position of #2 from #8 in 2012,” according to the report.
Aside from the rankings, one notable observation in the report states: “There will be no ‘Next Silicon Valley.’ There will be 30.” That 30 refers to the number of cities that made it on the top ecosystem ranking list.
New entrants to the top 30 include Tokyo (No. 15), Seoul (No. 20), Shenzhen (No. 22), Hangzhou (No. 28), and São Paulo (No. 30). The leading four new entrants demonstrate research and development strengths as well as unicorn fundings.
For those top 30 ecosystems, Asia Pacific has increased its share to 30 percent from 20 percent in 2012.
Ecosystems that have created over $4 billion in value from 2017 to mid-2019 are now at 70 ecosystems and growing; doubling from three years ago.
The expansion of funding to new ecosystems is visible in the Crunchbase dataset. We have seen the U.S. market move from 66 percent of global venture in 2013 down to 46 percent in 2019. Silicon Valley moved from 12 percent to 7 percent of overall venture capital funding over the same seven-year period. The U.K., by contrast, grew from 4 percent to 6 percent of global venture funding.
Super giant rounds are also being raised in many more regions.
According to the report: “When we analyzed companies in the Billion-Dollar Club–exits or private companies in technology with over $1 billion in valuation–in 2013-2019 we see that in 2013 only four ecosystems produced unicorns or billion-dollar exits. Today, a cumulative 80+ ecosystems have done so, astoundingly.”
On a cautionary note, the report raises concern that emerging ecosystems might be more vulnerable from the pandemic and consequent economic downturn than developed ecosystems. The interesting question for those nestled in Silicon Valley is whether remote work shifts the balance further, to the next 30.
Illustration: Li-Anne Dias.