DC is no longer one of the world’s top 15 places to start a company

DC is still in the top 20 ecosystems to launch a startup, though it dropped five spots since the previous year in a prominent national ranking.

The region is now ranked No. 17 in the 2025 Global Startup Ecosystem Report that the trade association and research group Startup Genome and the Global Entrepreneurship Network published today. DC ranked No. 12 in 2024, as well as No. 11 in 2023,  2022 and 2021. 

The report cited decreased global reach and patents in the DC ecosystem as contributing factors. Plus, its market reach — defined as startups’ access to local and global customers — shifted from a score of eight to one between 2024 and 2025. 

DC tied with Shenzhen, China, for the No. 17 spot. There are other ties in the rankings, including Toronto and Amsterdam for No. 20. 

Startup Genome defines ecosystems as a “shared pool of resources” typically within a 62-mile or 100-kilometer radius and considers accelerators, coworking spaces and educational institutions within that definition.

Startup Genome’s data science lead Parshant Sharma confirmed that the radius originates in the center of DC and extends 100 kilometers out; by this definition, the ecosystem includes parts of not just Maryland and Virginia, but also Pennsylvania and West Virginia. 

Similar to previous years, that radius extended as far as Baltimore, according to both Sharma and CEO Mark Anthony Thomas of the Greater Baltimore Committee. Thomas was featured in this year’s report as one of several global ecosystem leaders providing quotes on the overall global entrepreneurship economy. 

“Countries are investing heavily in market resiliency innovations, semiconductors, and supply chain-related companies leading this charge,” Thomas said in the report. “Policy leaders should focus on embracing the new innovations and deep technologies that offer tremendous impact on societal issues and maximize limited resources or constraints.”

Several industries dominate the DMV, including IT, government contractors, biotechnology and defense. 

Though its overall ranking went down, some of the figures contributing to DC’s score went up or remained the same. The region’s talent increased by one point while its knowledge score stayed at 10. DC’s score for quality and activity in funding also increased from six to eight; that figure refers to the number of investors, their experience and their level of activity. 

DC’s “ecosystem value,” which is valuations of funded startups, plus the “post-money” valuation of exits in the past two and a half years, decreased by more than 30%. 

When it comes to venture capital, DC has had a rambunctious year so far. According to PitchBook reports from earlier this year, VC activity kicked off in 2025 with $1.3 billion across 59 deals, following a blowout at the end of 2024 with $2.5 billion across 60 deals.

Most of those deals went to later-stage companies. 

The quarters before then were small in comparison: $449 million in the second quarter of 2024 and $544 million in the third one. 

On a continental scale, the DMV is ranked No. 8 in North America. That represents a drop from last year, when the region ranked No. 5. Nearby Philly nabbed that spot in this year’s report, which also raised the Pennsylvania metropolis’ overall ranking 12 spots to No. 13. 

This downgrade isn’t unique to DC. The total global value of startup ecosystems decreased by 31% since 2024, mainly because of the aftermath of Covid-19 boosted investments, per the report. But since 2019, the value has grown at a compounded annual rate of 11%.