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From Site Selection magazine, July 2023

Amid Disruption and Diffusion, Silicon Valley Still Tops

Findings from the Global Startup Ecosystems Report 2023 also highlight emerging and surging locations.

San Jose, California, which hosts the SubZERO Festival in the SoFa District every summer, also hosts enough startup activity alongside its regional neighbors to help Silicon Valley retain its titls as the No. 1 Global Startup Ecosystem.
Photo courtesy of Visit San Jose

by Adam Bruns

here’s no way to sugarcoat it: The technology sector is in the midst of an unprecedented slowdown,” writes JF Gauthier, founder and CEO of Startup Genome, in “The State of the Global Startup Ecosystem Report 2023” (GSER 2023). Produced by Startup Genome and the Global Entrepreneurship Network, the report is based on extensive research and analysis of data from 3.5 million startups across 290 global ecosystems.

Some of those leading ecosystems are seeing inflated valuations punctured and dramatic market corrections, Gauthier observes.

“Some critics have been rooting for the crisis to take Silicon Valley down a peg or two,” he writes. “But anyone vested in entrepreneurial innovation should root for a Silicon Valley that can continue to lead and strengthen the global startup revolution by investing in and partnering with great people and organizations all around the world.”

It appears Silicon Valley is doing just that.

The 2023 rankings find the top three ecosystems have maintained their positions since 2020, with Silicon Valley remaining at the top, followed by New York City and London tied at No. 2. That victory comes even as deals and company headcounts have contracted heavily in Silicon Valley over the past two years.

“Tech companies have laid off hundreds of thousands of the tech workers they hired in 2021’s boom time in recent months — in March, Crunchbase put the number so far in 2023 at around 135,000 workers in U.S.-based tech companies (or tech companies with a large U.S. workforce),” says the report. “While state governments, especially California’s, are reeling from loss of revenue and face budget deficits after years of surpluses, the spark of these layoffs could create an explosion of startups. There is a new level of availability of top-notch talent with tech know-how and industry expertise looking for new projects.”


Signs are strong those new projects are coming around.

“In mid-2023, Silicon Valley is undergoing a rebirth moment with signs of renewal including Atomic Semi bringing semiconductors back to the ecosystem and the constellation of AI startups emerging from the region, in part driven by OpenAI’s recent success,” the report states. “However, Silicon Valley as the cutting-edge frontier has dissipated and diffused across the U.S. and the world, thanks in part to the very success of the technologies that came out of its previous cycle allowing remote work, outsourcing and automation.”

Indeed, concludes one section of the report, “Reflecting AI’s increasing use and intersection with other sub-sectors, AI & Big Data is the sub-sector with the highest count of total VC deals, making up 28% of the global share in 2022. It also has the highest growth in number of exits, at 74%, from 2017–2018 to 2021–2022, and experienced a 34% increase in Series A count for the same period. As Deep Tech innovations become more integrated into the startup world, Deep Tech’s exit amount has grown faster than other technologies from 2017–2018 to 2021–2022, at 326% vs. 225%.”

Top 30 & Runners-Up

By arrangement with Startup Genome, here are other findings from the 112-page report, which identifies the top 30 global ecosystems and 10 runners-up. “These ecosystems,” the report says, “are more mature than other ecosystems globally, featuring more exits over $50 million and more funding activity.”

Boston and Beijing have both slipped out of the top five to No. 6 and No. 7 respectively, losing two positions each. This has paved the way for Los Angeles to rise to No. 4 and Tel Aviv to No. 5, both gaining two spots.

  • All major Chinese ecosystems dropped in the overall rankings: Shenzhen moved down 12 places, Beijing two, and Shanghai one, now standing at No. 35, No. 7 and No. 9, respectively.
  • Indian ecosystems continue to rise, with Mumbai leading the way by moving up five places to a tie at No. 31. Bengaluru-Karnataka and Delhi both moved up two places, to No. 20 and No. 24, respectively.
  • Melbourne has moved up an impressive six places from last year, to reach No. 33. The Australian ecosystem experienced a 43% increase in Ecosystem Value, to $25 billion.


Hot Spots & Rising Ecosystems

Singapore has entered the top 10 ecosystems for the first time, moving up an impressive 10 places from No. 18 last year. The ecosystem increased 100% in the count of exits over $1 billion to a total of four. Grab was the highest valued exit at $40 billion. The number of unicorns increased from 11 to 18, including Coda Payments, which raised a $690 million Series C round in April 2022. The ecosystem also experienced a 33% increase in the count of early-stage deals.

Melbourne has also seen notable progress, climbing six places from the GSER 2022 to No. 33. A 43% increase in Ecosystem Value comes thanks in part to increased exits over $50 million and above $1 billion. The unicorn count increased by one to three total, with Fintech company Airwallex the highest valued at $5.5 billion.

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. In large part due to MSP Recovery’s $32 billion IPO/reverse merger, Ecosystem Value increased by 160%. The count of early-stage deals also increased by 64.3% and the number of unicorns from five to seven, all helping take Miami up an impressive 10 places from the GSER 2022, to No. 23.

Helping to demonstrate India’s increasing strength as a tech startup nation, Mumbai has risen five places to No. 31 since last year (tied with Salt Lake-Provo). Its number of exits over $50 million increased by 60%, with the highest valued online marketplace Nykaa’s 2021 IPO at $7 billion. The number of unicorns has increased from six to 15, contributing to a 57% boost in Ecosystem Value.

Zurich’s recent performance has also been impressive, rising a remarkable 10 places from last year and making it to the runners-up, at No. 36. Exits over $50 million have grown a massive 300%, with Healthtech Pharvaris exiting at a valuation of $636 million. The unicorn count has increased from two to six, including Blockchain company Dfinity, which is valued at $9.5 billion, all contributing to a nearly 60% increase in Ecosystem Value from the GSER 2022.


Emerging Ecosystems 

Emerging ecosystems are startup communities at earlier stages of growth. The methodology for this ranking of the top 100 emerging ecosystems is intended to reflect this, showcasing the ecosystems displaying high potential to be top global performers in the coming years. The factor weights used to rank these ecosystems are slightly different from those used with the top ecosystems to reflect their emerging status and emphasize the factors that have more influence in ecosystems that are just beginning to grow. Less weight is given to the number of exits over $50 million and startup activity is more focused on early-stage funding than in the top 40 ecosystems. Among the findings:

  • The top 100 Emerging Ecosystems are collectively worth over $1.5 trillion in Ecosystem Value, a 50% increase from the GSER 2022.
  • Europe is the most represented region in the Emerging Ecosystems ranking and has expanded its share from 37% to 41% since the GSER 2022.
  • Copenhagen is No. 1, moving from the runners-up in the main ranking due to being outperformed by other regions such as Zurich. However, its Ecosystem Value increased by 29% and it saw growth in early-stage funding amount and in the number of exits over $50 million, with review platform Trustpilot the top exit in an IPO valued at $1.5 billion.
  • Barcelona has moved up five positions since last year, reaching No. 4. Its highest-valued unicorn, tech-enabled delivery platform Paack, was valued at $1.6 billion, helping to take the Ecosystem Value to $21 billion, a 91% increase from 2022.
  • Estonia has moved up an impressive 28 positions since the GSER 2022, reaching No. 10. Its rise is thanks to an increase in early-stage funding rounds, a 100% increase in exits over $50 million, and the new inclusion of CRM and intelligence platform Pipedrive’s 2020 $1.5 billion buyout.
  • New Zealand has moved up 14 positions, reaching No. 20 in the Emerging Ecosystems ranking thanks in part to an increase in exits of over $50 million and a new unicorn, Lodestone Energy, valued at $1.3 billion.
  • Further supporting the pattern of India growing and China declining, Pune has moved into the 31–40 range from 51–60 in 2022, experiencing both an increase in exits over $50 million and in the number of unicorns, while Guangzhou dropped seven positions from last year, to No. 14.
  • Riga has entered the Emerging Ecosystem ranking for the first time, in the 91–100 range, thanks in part to print-on-demand service Printful achieving unicorn status by raising $130 million in 2021. 

Adam Bruns
Editor in Chief of Site Selection magazine

Adam Bruns

Adam Bruns is editor in chief and head of publications for Site Selection, and before that has served as managing editor beginning in February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.


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