By Nancy Dahlberg
Miami moved up an impressive 10 places and is now solidly ranked among the top startup ecosystems in the world, according to the 2023 Global Startup Ecosystem Report released by Startup Genome and the Global Entrepreneurship Network today. The GSER includes research and insights from more than 290 entrepreneurial ecosystems and 3.5 million startups.
The 354-page report contains its ranking of the top 30 ecosystems globally, as well as 10 runners-up. Miami was a runner-up in the 2022 report. This year, the Greater Miami area ranks No. 23 in the world.
The Miami metro ranked ahead of Austin, New Delhi, Sao Paulo, Philadelphia, Denver-Boulder, Atlanta and Vancouver. The top 10 were, in order: Silicon Valley, New York City, London, Los Angeles, Tel Aviv, Boston, Beijing, Singapore, Shanghai and Seattle. The rankings were based on scoring in six areas: Performance, Funding, Market Reach, Connectedness, Talent & Experience, and Knowledge.
“A 10-spot jump to #23 on the GSER is something we can all celebrate,” said Susan Amat, VP for Education, Global Entrepreneurship Network and Director of Entrepreneurial Initiatives, University of Miami Herbert School of Business, who was also part of GSER’s global report committee. “Many of us remember the initial vision of Emerge Americas over a decade ago – now it’s being realized in quantitative terms.”
Several aspects of this methodology require years to move the needle up in these rankings, she said, in an interview with Refresh Miami. “If we continue this trajectory, while connecting more dots between and among deep tech and life science researchers and commercialization partners, we should be well positioned for future.”
Amat continued: “Some of our biggest strengths, including the incredible diversity in our ecosystem, the strong female leadership across the community, the global connectiveness we experience every day, and our new neighbors, contribute to the Miami we are all proud to call home.”
By some measures, Miami scored even higher than No. 23. The Miami metro area made the biggest jumps in the categories of Performance, scoring 7 out of 10, and Funding (6/10). Performance includes indicators like growth in overall ecosystem value and exit sizes at the $50M+ and $1B+ levels and Funding captures the concept of access through measuring early-stage deals (through Series A) and the quality and activity of investors, Amat explained. Indeed, the Miami-Fort Lauderdale metro area logged its best year ever for venture capital in 2022, with South Florida companies attracting $5.8 billion. In tne the report, South Florida also scored well in Market Reach (7/10), addressing startup access to customers and their ability to ‘go global.
“Our community has seen unprecedented quality and quantity of investment expertise, offering their experience as board members and mentors, as well as their networks, impacting all of these variables,” added Amat.
Some Miami highlights from the report:
- The Miami area ranked as a Top 15 Global Ecosystem in the Performance category and as a Top 20 ecosystem in the Funding category.
- In Miami, the number of $1 billion+ exits increased from two to five from the GSER 2022, and the number of $50 million+ exits from 11 to 19.
- The count of early-stage deals increased by 64.3% and the number of unicorns grew from five to seven.
- Miami ranked even higher than No. 23 in some sectors, such as life sciences and medtech.
Still, challenges remain in “Connectedness” (scoring 1 out of 10), Knowledge (1/10) and Talent and Experience (3/10), according to the report. Connectedness may seem a head scratcher with events going on in South Florida all the time but Amat said the local connectedness indicator is highly tied to events tracked on Meetup.com and the global connectedness component is based primarily on secondary office hosting.
“Our ecosystem is blessed with strong engagement, lead for over a decade by Refresh Miami, plus hundreds of events a month that may not use Meetup.com. We are also a place where many companies move their headquarters from cities across the globe, thus these variables aren’t teasing out the reality of our bounty,” Amat said.
As for the other two categories, Knowledge is mostly based on patents from the ecosystem. Compared to the other top 30 ecosystems, the Knowledge category is a major area for improvement that is typically tied to university engagement, such as commercialization/licensing, testing/pilots, as well as applied or sponsored research opportunities, Amat said. “Our strong regional universities will be the key to gains in this area.”
The Talent and Experience area is strongly tied (80% of the total score) to tech talent with $50M+ exits and those who are highly ranked on GitHub, she said. “There is a nod (20%) to life sciences with half of that score based on number of STEM students in the region. The low hanging fruit is simply in reviewing their methodology and ensuring our story is being told accurately,” Amat added.
Hazel Boydell, Editor-in-Chief of Startup Genome, said these three categories can typically lag in young ecosystems and could “catch up” over the next several years. Boydell and the team released the report at The Next Web Conference in Amsterdam this morning.
In particular, Boydell told Refresh Miami, “Talent and Experience looks at the talent pool that early stage startups have access to and the degree of startup experience already in the ecosystem so what you will probably see is this is going to go up over the years as more talent is attracted to Miami. [For talent,] we look at the number of STEM students, the cost of the software engineer, the number of coders in the ecosystem. The experience is more the bulk of the number of large exits that are in the ecosystem.”
In interviews she conducted for the report, Boydell said “the sentiment I’m getting is Miami is a really hot place to be right now. There is a lot going on and it’s rapidly exploding, so that’s an exciting time to be in an ecosystem. And seeing this jump in rankings, and having these big exits can only help drive more founders toward the ecosystem. I hope it really helps boost the success even further.”
The GSER has been produced since 2012. Miami broke onto the Global Listing as a runner-up (tied at 36th with four other ecosystems) in 2019. In 2020, Miami moved up to 31st. In 2021, despite the momentum the ecosystem was experiencing, the ecosystem fell off the list (it ranked No. 10 on the Emerging Ecosystems list) and a researcher explained that the ecosystems in the universe that they were studying had grown so there was more competition. In last year’s report, Miami was again a runner-up, ranking 33rd on the Global Top 30 ranking – setting itself up to leap 10 places to No. 23 this year.
This year’s Emerging Ecosystems ranking included 100 earlier-stage metro areas. The only Florida ecosystem ranked was Tampa, which ranked No. 29th on the Emerging Ecosystems list.
Here are some global highlights and insights of this year’s report:
- A recession is a good time to invest in startups — high interest rates can benefit startups, concentrating capital and talent into ventures that create value. Startups funded during the Great Recession had slightly higher exit multiples over total money invested than those funded during economic expansions.
- VC funding began its downward trend in the first quarter of 2022, dropping 13% from Q4 2021. Overall, 2022 declined by 35% from 2021.
- Although fewer startups were funded in 2022 globally, they received larger sums. There was an 18% decline in the number of deals, but a 17% decline in deal amount, meaning that the average deal size grew 2%.2022 showed a slowdown in the number of unicorns, a global decline of 40% from 2021’s 595 to 359. However, seven ecosystems produced their first tech unicorn in 2022.
- The top three ecosystems have maintained their positions from 2020, with Silicon Valley remaining at the top, followed by New York City and London tied at #2. Boston and Beijing both slipped out of the top five to #6 and #7 respectively, paving the way for Los Angeles to rise to #4 and Tel Aviv to #5. Singapore has entered the top 10 for the first time, while all major Chinese ecosystems dropped in the overall rankings.
“Despite current economic challenges, we are confident that, equipped with the right knowledge, entrepreneurs, policymakers, and community leaders everywhere can leverage opportunities to come together and show how innovative technologies can not only continue to drive growth and job creation, but simultaneously help save the planet and ensure a better future for everyone,” said JF Gauthier, founder & CEO of Startup Genome. “This essential mission cannot be put on hold while we wait out rocky economic times.”
READ MORE ON REFRESH MIAMI:
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- Hiberus of Spain plants its Americas HQ in Miami
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Follow Nancy Dahlberg on Twitter @ndahlberg and email her at [email protected]
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