Philadelphia remains one of the top startup ecosystems in the world, according to new rankings.
In its annual report released Thursday, Startup Genome ranks the city at No. 27 out of more than 280 regional ecosystems around the world based on factors like startup growth and activity, innovation and research, capital availability, talent and support for companies. Philadelphia maintained its international rank from 2022 as well as its No. 11 ranking in the U.S., even with some shakeup in the national top 10 from last year.
At the top of the global list is Silicon Valley, followed by New York and London in a second-place tie. Los Angeles (No. 4) and Tel Aviv (No. 5) round out the top five, taking the places held by Beijing and Boston in the 2022 rankings. Beijing fell to No. 7, while Boston dropped to No. 6.
The numbers support Philadelphia's position as a top-30 metro for innovation, with some of them dwarfing the global averages. Startup Genome estimates the total value of Philadelphia's startup ecosystem is $68 billion, nearly double the global average of $34.6 billion. By comparison, the startup ecosystem in Pittsburgh is valued at $12 billion.
Venture capital funding coming into the Philadelphia region totaled $16 billion from 2018 to 2022, compared to the global average of $6.6 billion. In that same time frame, the region saw 278 exits, more than triple the international average of 91.
For this year's Startup Genome report, metros received scores from one to 10 in seven main categories: performance, funding, connectedness, market reach, talent and experience, and knowledge.
Philadelphia scored well for its market reach, or the ability of early stage startups to access customers and scale effectively, with a 7. Despite its reputation for eds and meds, the area scored a 1 for knowledge, which measures innovation through research and patent activity. The market was middle of the road for performance, funding, and talent and experience, scoring a 4 for each.
Startup Genome acknowledged the region's growing reputation as a life sciences hub but said Philadelphia is making understated strides in fintech and enterprise tech. It lauded the region's relative affordability compared to New York and Washington, D.C., which ranks No. 11 in the world and No. 6 in the U.S.
Philadelphia's "excellent educational institutions and diverse workforce are attracting startups" as well, according to Startup Genome.
“Philadelphia continues to build on its strengths in the life sciences, boasting several high-profile exits in recent years. However, the ecosystem has also seen a rise in eCommerce and HR tech startup success stories — marking an evolution driven largely by the talent flowing from its strong local universities, and backing from its entrepreneurial support organizations," said Marc Penzel, founder and president of Startup Genome.
The report adds that "outside investment has flooded into the ecosystem in recent years," pointing to a $3.8 billion influx from Bay Area investors and $4.6 billion coming from New York in 2021. Local accelerators and funding coming from within the region have also helped to support startups, with the report pointing to Ben Franklin Technology Partners of Southeastern Pennsylvania and the University City Science Center's Capital Readiness Program.
Drexel President John Fry, who has been active in jumpstarting innovation-focused developments and connecting Philadelphia's innovation industry, was also highlighted in the report.
“It is heartening to see Philadelphia recognized for its fast-growing startup ecosystem. This is a testament both to the hard work that our area's innovators are doing to address our society's biggest challenges and to the steadfast efforts of the region's entrepreneurial support organizations to invest in and elevate those efforts," Fry said in a statement.
