The growth of Louisville's startup ecosystem is stagnant — well, at least according to one measurement.
M25, a Chicago-based venture firm, has released its annual ranking of the best startup cities in the Midwest. Louisville came in at No. 14 (again).
Louisville's startup ecosystem has been stuck jostling between No. 14 and No. 15 with Lafayette, Indiana, since 2018. The ranking, which takes into account data on startup activity, access to resources and business climate, isn't an exact reflection of the ecosystem, meaning cities could still be improving while not moving up the ranks.
So let's break it down: Louisville's total score was 16. It's startup density (score of 13.2) is at least on par with Indianapolis (14.1) and St. Louis (13.3), which are both in the top five. Louisville also had a higher number of exits than Cincinnati, Milwaukee and Detroit, all of which rank higher on the list.
Louisville excelled in at least one section of the business climate category: cost. It scored higher than all of the other top-ranked cities both for its labor costs and costs of living, and also scored well for its tax climate.
Where Louisville falls short is in the access to resources category. It looks at talent, sales and innovation (think: patents, university ecosystem, workforce education), investor presence, accelerators and incubators, and government. Louisville lagged behind most other top-ranking metros in its number and rank of accelerators and incubators, as well as total capital invested by VCs.
Here are the top 20 Midwest cities for startups (and their respective scores), according to M25:
- Chicago, IL (49.1)
- Minneapolis, MN (35.4)
- Pittsburgh, PA (28.2)
- Indianapolis, IN (26.7)
- St. Louis, MO (24.2)
- Columbus, OH (23)
- Detroit, MI (21.5)
- Ann Arbor, MI (21.3)
- Madison, WI (21)
- Cincinnati, OH (19)
- Cleveland, OH (18.9)
- Kansas City, MO (18)
- Milwaukee, WI (17.5)
- Louisville, KY (16)
- Lafayette, IN (15)
- Bloomington, IN (14.4)
- Omaha, NE (13.6)
- Champaign, IL (13.4)
- Lincoln, NE (12.4)
- Des Moines, IA (12.3)
You can see the full scores for each weighted category and 27 variables here.
Notably, Lexington has fallen from the top 20 in recent years. It's dropped from its 2018 peak of No. 18 on the ranking to No. 26 in 2021.
M25's annual ranking pulls stats from 18 different data sources, ranging from the US Census to the HumanPredictions tech talent database to individual state government websites. Startup and investor data is gathered via Pitchbook.
