The DFW region ranks among the top ten metro areas with the most startup businesses, according to a new report by fintech company Roofstock.
The Dallas-Fort Worth-Arlington region took the No. 5 spot among large metro areas on the report, with a startup formation rate of 9.82 percent. The number of new businesses created each year between 2014 and 2018 and dividing that by the total number of firms, the report found about 10,700 startups are formed in the region each year. That translates to startups creating nearly 70,000 new jobs annually, making up about 15.1 percent of all new jobs.
“Unsurprisingly, at the metro level, most of the leading hubs for startup formation are found in the states with the highest levels of startup activity,” the report states. “Many locations in the West and South continue to see strong rates of new business creation and associated job growth.”
Those numbers were enough to put North Texas well ahead of the Houston region, which took the No. 10 spot with a startup formation rate of 9.48 percent. However, it was not enough to take the Austin metro area, which came in at No.3 with a startup formation rate of 10.61 percent.
For large metro areas, the Las Vegas area came in at No. 1 with a formation rate of 11.44 percent, followed by the Orlando area, which had 10.95 percent.
The only other Texas city mentioned in the report was Midland, which took the No. 14 spot on the small metro list with a formation rate of 7.8 percent.
As a whole, Texas ranked well for startups. The state ranked No. 4, with a startup formation rate of 9.28 percent, which means nearly 36,0000 startups were created each year, themselves creating about 220,000 new jobs per year.
The report highlights the region’s growth as a developing tech hub. According to Telstra Ventures, earlier this week, the DFW area took the top spot for the highest growth rate of VC investments in 2020. According to that report, the region saw a 66 percent increase in VC investments, which a large portion of that in the health tech industry.
The Roofstock report notes that since 2010, the largest increase in startup formation activity has been seen in construction, information, and real estate industries. In industries like management, wholesale trade and food services have declined.
“New startup formation is distributed unevenly across geographies as well as industries,” the report states. “Many of these states offer some combination of business-friendly policies, low individual and corporate tax rates, relatively low costs to operate, good educational institutions, and population growth that provides both a customer base and a market for labor.”
