Startups have been mushrooming in hundreds of cities around the world. But some cities have the right conditions and regulations to attract entrepreneurial talent and help them flourish. Entrepreneurs want to be in cities that offer a supportive environment for innovation. Silicon Valley in California remains one of the world’s biggest startup hubs. But some other cities have also seen an incredible upsurge of startups in the last few years. Here we take a look at the top 10 best startup cities in the world.
These are the best startup cities
Valuer, a matchmaking tool for startups and corporations, has compiled a list of the best startup cities on the planet. A startup city is more than just a place with a bunch of talented people and a bunch of investors with deep pockets. Valuer took into account a variety of factors such as the startup culture, infrastructure, regulations, global mindset, transportation, education systems, market, capital, and a high quality of life to rank the startup cities.
10- San Francisco, United States
It wouldn’t be wrong to describe the San Francisco Bay area as the capital city of the startup world. But it’s quite surprising to see Silicon Valley at the bottom of this list. It is home to more than a quarter of the world’s unicorn startups. Many of the world’s largest technology heavyweights including Apple, Google, Facebook have a strong presence in the San Francisco Bay area.
Valuer says San Francisco is the world’s largest startup ecosystem, valued at around $279 billion. Silicon Valley startups received more than $26 billion in venture capital last year alone. It’s the best place in terms of the entrepreneurial spirit and salary. But it’s held back by a lower quality of life, insanely high living costs, safety, and the ever-increasing housing market. The New York Times has described Silicon Valley as a “housing villain.”
9- Amsterdam, The Netherlands
Amsterdam ranks among the best cities to live, but that’s not the only reason it is one of the best startup cities in the world. It offers the fastest mobile internet speeds, highest average net salary, and the highest standards of living, says Valuer. The cost of living here is also lower than in most cities on this list. It also attracts and retains talent from around the world. All these factors have helped Amsterdam build a vibrant startup ecosystem.
8- Copenhagen, Denmark
Copenhagen offers a high quality of life, an excellent education system, and advanced healthcare facilities, which help it attract international talent. The startup ecosystem in this city is “incredibly interconnected.” Though the number of startup investments has been declining in recent years, the size of investments is getting bigger. The Danish government has set up the “Danish Startup Fund” to help startups. However, Valuer noted that it’s difficult for the foreign talent “to thrive professionally in Denmark.”
7- Boston, United States
Boston is home to Harvard, MIT, and other prestigious educational institutions. Most of the startups in the area are linked to one of these institutions. Boston’s startup ecosystem is held back by the “absence of shared driving power.” Startups here focus on biotechnology, robotics, pharmaceuticals, life sciences, and enterprise software. Entrepreneurs in Boston benefit from a large number of incubators, mentors, and angel investors.
6- London, United Kingdom
London is more than just a global financial hub. It has a vibrant startup ecosystem as well. However, there are some concerns regarding the health of its startup ecosystem due to Brexit. Amid uncertainty over Brexit, many startup founders and other talented individuals are leaving London for other cities such as Amsterdam and Berlin. London has more than 6,000 startups including Shazam and TransferWise.
5- Bengaluru, India
Bengaluru is a surprise entry in the list of top 10 best startup cities. Hailed as the Silicon Valley of India, Bengaluru has transformed itself from an outsourcing hub to a vibrant startup city. It attracts talent from across India and other countries. The government has also been encouraging startups. The city offers affordable housing and a high quality of life. Flipkart and InMobi are the notable startup success stories from Bengaluru. Walmart last year acquired Flipkart in a $16 billion deal.
4- Stockholm, Sweden
The Swedish capital is a startup unicorn factory. It has one of the best startup ecosystems in the world. Stockholm has produced startups like Skype, Spotify, Klarna, King and Minecraft. According to the investment firm Atomico, Sweden has the second highest concentration of billion-dollar companies per capita. The Scandinavian nation also offers a high quality of life and an excellent education system.
3- Helsinki, Finland
The Finnish government supports entrepreneurs in every possible way to let them build successful startups. There is no shortage of early-stage funding. The Finnish Startup Permit gives entrepreneurs an opportunity to build a business from scratch and integrate it into the local ecosystem, says Valuer. Helsinki also has a large number of accelerators, innovation hubs, and investors. Entrepreneurs get opportunities to connect with like-minded people in other ecosystems.
2- Tel Aviv, Israel
Tel Aviv is the Mecca of entrepreneurs. Its population is less than half a million, but it’s home to many of the world’s most innovative startups. Many US technology heavyweights have built their R&D centers in Tel Aviv because of its incredible pool of talent. A high quality of life, fast internet speeds, great entrepreneurial spirit, and easy access to funding have helped Tel Aviv become one of the best startup cities on the planet.
1- Berlin, Germany
Berlin, not San Francisco, is the best startup city in the world, according to Valuer. Its diversity and inclusiveness gives it an edge. Berlin also has a relatively lower cost of living. The city is a reflection of Germany’s entrepreneurial and innovative spirit. Entrepreneurs have easy access to funding. Many startups are moving their offices from London to Berlin amid Brexit concerns. The city has produced many successful startups in e-commerce, gaming, adtech, SaaS, and other areas.