Moving on up: Miami jumps 7 places into top 20 in global startup ranking

The Miami metro area ranks 16th in 2024 Global Startup Ecosystem Report released today. We dig into the reasons for our ecosystem’s rapid ascent.

By Nancy Dahlberg

Miami moved up an impressive seven places and is now solidly ranked among the top startup ecosystems in the world, according to the 2024 Global Startup Ecosystem Report released by Startup Genome and the Global Entrepreneurship Network today. The GSER includes research and insights from more than 300 entrepreneurial ecosystems and 4.5 million startups.

The 309-page report looks at the current state of startup activity and related investment and includes a ranking of the top 40 global ecosystems and top 100 emerging ecosystems currently driving innovation. Results  globally were impacted by the notable decline in global VC funding and sharp decrease in exit values, the scarcity of IPOs, the resilience of cleanttech investments, and the surge in generative AI funding, the report said.

Miami (defined in the report as the tri-county area) has leapfrogged, with the 7-place jump being the highest in the top 40 this year. Last year, the metro area ranked 23rd in the world. This year it solidly broke into the top 20 at No. 16, of course benefiting from the explosive migration of founders and investors the metro area experienced during the pandemic.

The Miami metro ranked ahead of Chicago, Seattle, Austin and San Diego and Atlanta, as well as Delhi, Sao Paulo, and Toronto. The top 10 were, in order:  Silicon Valley, London, New York City, Tel Aviv, Los Angeles (the previous four were tied), Boston, Singapore, Beijing, Seoul and Tokyo. The rankings were based on scoring in five areas and Miami’s scores were: Performance (7 out of 10), Funding (7), Talent & Experience (3), Market Reach (8) and Knowledge (1).

In the area of performance, “a big reason why Miami jumped so much is it had they’re continuing to have a number of large exits. Miami had a 28% increase since the last time we did our GSER last year,” said Forrest Wright, Research Assessment Lead for Startup Genome. “The total experience that comes with the large exit pays dividends for the future generations of startups in the ecosystem, and  it serves as a signal for investors across the world … that companies can successfully scale from there.”

Miami’s $2.1 billion exit value in the 2023 report ranks as the 13th highest globally. The Miami metro’s exits were led by Redzone Software, a digital manufacturing startup acquired at $885 million, and Freightos, a supply chain startup that as part of a merger was valued at $500 million, the report said.

But exits aren’t the only reason, Wright said in an interview with Refresh Miami. In the funding category, the Miami metro area saw a 10% growth in seed and Series A funding deals (from the previous report), “pretty amazing in the VC winter we are experiencing.” The time period studied for deals was the second half of 2021 through 2023, and that was up from the second half of 2020 through 2022. Indeed in 2022, despite the falloff in most markets, venture activity in Miami actually increased and hit an all-time record of $5,8 billion, according to my analysis in the 2023 eMerge Americas Insights Report.

More Miami results

While later stage funding plummeted in Miami and elsewhere in 2023,  according to the GSER report “several Miami startups show strong promise.” The report gave a shoutout to homegrown Miami blockchain startup Quicknode.

According to Startup Genome’s research, the Miami ecosystem is valued at $95 billion, Wright said.

There are six active (pre-exit) unicorns  in Miami, which places it 12th among US ecosystems, and that number has been going up steadily the last few years, a powerful signal for the ecosystem that there’s talent in Miami and startups can scale up and access investors.

What’s more, the GSER report lauded Miami for its “top tier” market reach not only domestically but globally. It’s one of the highest rated US ecosystems, based partly on the number of company secondary offices in the region, ranking seventh of all US ecosystems. Miami companies also have a strong number of secondary offices in international markets, ranking Miami ninth overall for that, and “it’s not that far behind Silicon Valley,” Wright said. To be sure, global connectedness gives startups access to more customers as well as global knowledge about new business models and innovations.

 “Miami, even though it’s not a top three US ecosystem, it seems like there’s a strategy to make it one of the more globally connected ones,” he said. Indeed, soft landing programs locally have been growing over the years — with Mana Tech, Global Ventures and CIC offering strong soft landing programs, to name a few. Plus, Miami, long a magnet for Latin American startups has been growing its ties in Europe, Israel and beyond.

“Obviously there are a lot of startups internationally that for many reasons want to have an office in Miami, but the fact that you’re also being proactive about it, I think that’s really promising,” Wright said. “It’s clearly paying off here and I think as the VC landscape is continuing on this downward trend globally, the more creative you can be in finding new markets and finding new opportunities, it’s only going to be for your benefit.”

Still, challenges remain in Talent & Experience (scoring 3 of 10) and Knowledge (1/10), according to the report. These categories typically lag in younger ecosystems.

Ecosystem challenges and moving the needle

The Talent & Experience area is tied to such factors that include the number of large exits and Series A funding rounds over the last decade,  the number of developers highly ranked on GitHub, the number of STEM students enrolled in local universities, life science disciplines available, and software engineer salaries. What can be gleaned from the report is that “Miami does a great job of attracting talent, but there is maybe not as much native generated talent yet,” Wright said.

He said a positive sign is the fact that satellite university campuses – such as Babson and more recently Northeastern – have opened and other institutions are considering the Miami region. “They’re sensing the opportunity of ‘oh, we can help fill that space producing knowledge and talent’. Of course, these are longer term investments, but you may start to see more of that in the next couple of years,” Wright explained.

We asked Wright what could move up Miami’s ranking? “It’s really about trying to boost the great universities that are already there, in terms of STEM discipline majors and attracting students with high talent in those areas, and of course getting great faculty is going to help. The fact that the Series A count is going up [shows] Miami is in this great position now. Continuing to get Series A deals and having successful exits is really the key, and just doing that year after year is how these things develop.”

The Knowledge category, where Miami ranked 1 out of 10, is largely a proxy for the number of patents coming out of both the university and corporate sector as well as university research output. With Miami neither having the elite universities or the corporate base that some higher ranking ecosystems do, a larger score should not be expected, but the category is only 5% of the overall ranking.

To improve the overall ranking, develop more talent attraction and homegrown talent pipelines, he said. “I think there’s been more of that in Miami from what I’ve seen,” said Wright, mentioning the growing support for startups and tech talent programs at the university level as a major plus.

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 2022, Miami was again a runner-up, ranking 33rd on the Global Top 30 ranking – setting itself up to leap 10 places to No. 23 in 2023 and No. 16 this year.

Tampa, Orlando land on Top Emerging Ecosystems ranking

This year’s report also included the Emerging Ecosystems ranking of earlier-stage metro areas. Two other Florida ecosystems ranked on that list. Orlando and Tampa were runner-ups, with Orlando ranking in the 21-30 group, and Tampa ranking in the 31-40 group on the Emerging Ecosystems list.

Tampa, which also ranked in the Emerging list last year, already does well partially because of the existence of engaged corporates in the market, as well as startup support organizations. The market hasn’t had the number of large exits as Miami, though it does have two active unicorns currently, Wright noted. Tampa Bay does have pretty strong funding score for its size but the median seed round is small. “You see a little bit less of that early stage angel experience.”

Similar factors also helped Orlando rank on the Emerging list for the first time. Orlando however particularly excelled in the Knowledge category. Its region includes the Space Coast, and its strong corporate sector includes many defense and aerospace companies that are churning out lots of patents and talent generation for them is supported by the region’s university programs.

Global highlights

Here are some global highlights and insights of this year’s report:

  • The global Series A funding amount in 2023 was down 46% in 2022, and the value of large exits, defined as $50 million or more, fell 47% over the same period.
  • The number of new unicorns in 2023 was down 58% from the 2021 peak. Silicon Valley led with 15 univorns, though this was down 80% from 2022. In 2023, more than half of the new unicorns were in the GenAi or DeepTech spaces, a higher rate than 2021.
  • Generative AI saw a surge in funding, with nearly 20% of all VC funding in 2023 going to GenAI-focused startups. GenAi VC funding increased 3x in 2023 compared to 2022. Deal counts nearly doubled.
  • Tokyo and Seoul moved up to became top 10 ecosystems for the first time (#10 and #9 respectively). The top two Chinese ecosystems – Beijing and Shanghair, dropped to #8 and 11 respectively.
  • Europe was the most represented region in the Emerging Ecosystems Ranking, at 42%, followed by North America at 27% Madrid moved up 12 spots to claim #1 in the Emerging list.

“Creating more entrepreneurs is the most important thing that we can do as an ecosystem of enablers and policymakers,” said Jonathan Ortmans, president of the Global Entrepreneurship Network.

Download the report here.

Screen shots from GSER 2024 report: Top 20 Ecosystems

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Nancy Dahlberg