Startups

Philly is movin’ on up in the top 30 list for global startup ecosystems

Ranking 27th overall, the city scored high for performance and market reach, and is celebrated for its life sciences prowess.

Philadelphia's skyline, as seen from University City.

(Photo by Flickr user AI R, used via a Creative Commons license)

For the third year in a row, Philly is trending upward on the Startup Genome’s Global Startup Ecosystem Report (GSER) report.

After ranking No. 28 on the org’s global list for best ecosystems for startups in 2021, Philadelphia lands at No. 27 in 2022. In 2020, Philly was ranked as the top “emerging” startup ecosystem in the US.

The cities are rated on a scale in six categories: performance, funding, connectedness, market reach, talent and knowledge. Startup Genome considered 300 ecosystems for this year’s list. Philly scored high for performance and market reach, middle of the road for talent and experience, and low for funding, connectedness and knowledge compared to other cities.

The report also noted the “vibrant” life sciences community, in line with recent news such as the city’s recent No. 8 ranking on CBRE’s Life Sciences Talent Report and the constant building of much-needed lab space.

Read the report

Ben Franklin Technology Partners, University City Science Center and Drexel University worked in concert with Startup Genome to showcase Philadelphia. Diverse and skilled talent, a university research hub, and hospital networks were cited as reasons startups should consider Philadelphia. The report also highlights the growing local AI, big data and analytics industries as attractive to startups.

“As for major innovation trends, the rising digits tell the story: Web3, Industry 5.0, Supply Chain 4.0. And, of course, 5G. Innovations in — among many other sectors — digital finance, AI-discovered molecules, and climate- change mitigation are remaking not just business, but also the social and physical worlds,” the report said.

Nearby DC scored 11th on the global rankings, while the Silicon Valley area took first and New York City and London tied in second place. Fellow Pennsylvania city Pittsburgh jumped to No. 13 on the emerging startup ecosystems list after ranking No. 23 on that list last year.

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“The accelerated ranking of Philadelphia in the 2022 Global Startup Ecosystem report validates that Philadelphia is on an upward trajectory,” Science Center President and CEO Tiffany Wilson said in a statement. “We’re well positioned to continue that momentum and if done right, serve as a global model for not only startup acceleration, but inclusive ecosystem growth.”

Here’s Philly’s report card:

  • Total early-stage funding — $1.3 billion (vs. a global average of $687 million)
  • Number of exits from 2017 to 2021 — 253 (vs. 101)
  • Ecosystem value — $46 billion (vs. $28.6 billion)
  • Median seed round — $525,000 (vs. $671,000)
  • Median Series A round — $5 million (vs. $4.7 million)
  • Software engineer salary — $80,000 (vs. $46,000)
  • Total VC funding — $10 billion (vs. $4.5 billion)
  • Time to exit — 10.1 years (vs. 9.4 years)

The global top 30 ecosystems were ranked on performance in three categories. First, it measured ecosystem value as the total exit valuation and startup valuations over two and a half years. It also looked at the number of exits over $50 million and $1 billion. And it measured startup success, counting early-stage (Series A and B) to late-stage success (the ratio of Series C to A companies and number of billion-dollar club startups), as well as speed to exits and IPO.

Some of its marked success in the later-stage funding category can be attributed to the city’s standout past year for VC funding. 2021 was the city best-ever year for venture capital, with $8 billion invested. Consider, too, dbt Labs’ $222 million Series D and Houwzer’s $118 million Series B, both from February, plus Gopuff’s $3.6 billion combined recent investments.

“While so many ponder what location and place now mean to innovation, Philadelphia’s ranking in this year’s GSER supports what we know and feel: this place is thriving,” said Scott Nissenbaum, president and CEO of Ben Franklin Tech Partners. “The steady growth of opportunity within Philadelphia’s life sciences and technology communities gathers increasing interest throughout the world, while our ecosystem keeps making strides for lasting impact.”

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