Whoever thinks that startups are just job engines, is wrong. These enterprises can bring innovation to cities around the world, since the digital technology-related sector has been surpassing other business segments forthe last twenty years.
With a steady and continuous development, the digital industry is the most important growth sector for startups. Nowadays more than half of startups capital worldwide is related to web services and apps (18.6%), software as a service (15.3%), e-commerce (10.1%) or IT & Software (8.6%).
Cities and startups
Startups are innovation and job machines, but also produce generous incomes. Since in our digital world there are no geographic limits, new businesses can look from anywhere and financial opportunities are limitless.
Then, what makes each startup ecosystem so special? It is the quality of life and unique specifics that each city can provide. Each city on our list has earned the right to be a part of the global startup revolution and therefore gaining the benefits of job creation, economic growth and innovation.
1. Berlin, Germany
Berlin is Europe’s new Silicon Valley, with unique competitive advantages, diversity and inclusiveness. The city provides average office rent and affordable living costs, ideal for people with an entrepreneurial spirit. Berlin welcomes talent from everywhere!
Berlin also offers economical support from investors and government funds. You can access to long-term loans at a reasonable fixed interest rate. The city has incubators like Hubraum, Betahaus or Project A Ventures; and was been home for startups such as N26, Lemoncat or Coya.
2. Tel Aviv, Israel
The business capital of Israel is the top entrepreneurial destination for innovation, having a notorious pool of talent and many startups in technology. The Israeli businessman is also a fierce negotiator and likely to take risks. Having a unique mixture of highly advanced startup ecosystems with the Mediterranean culture, everybody speaks English and Wi-Fi coverage is everywhere.
The cost of living is a little high, but the food is great. Startups like LawGeek, Lemonade or Missbeez took Tel Aviv as their home base. The city also has accelerators and Incubators like 500 Startups, By The People or 8200 EISP to help startups.
3. Barcelona, Spain
In Barcelona, founders and investors may be trying to play it safe, but the city has a strong startup economy. It employs almost 12,000 people in sectors like IT, E-commerce, Big Data, Mobile Software and Services and, of course, Tourism.
In 2019, more than $700 million was invested in startups, so this place in ours list is more than justified. Barcelona is home of startups like Coverfy, CornerJob or WesmartPark; and has co-working spaces such as MOB, Betahaus or Talent Garden Barcelona S.L.
4. Helsinki, Finland
Helsinki’s ecosystem has talented entrepreneurs, hubs, accelerators, investors and key influencers. It also offers strong government support to newly formed business. Companies like Nokia, Rovio, Supercell, Clash of Clans or Linux are related to this city’s entrepreneurial legacy.
The greatest feature is its global connectedness and the significant relationships between entrepreneurs in different ecosystems. Startups like Enevo, Sulapac or Oura are taking advantage of what Helsinki has to offer.
5. Madrid, Spain
The Spanish startup ecosystem was demonstrated that it can be at the top of the international stage. The bonding between founder and investor is starting to pay off, and also individual success in Madrid is being supported, respected and celebrated.
Although local entrepreneurs are focused on risk minimization, the startups in Madrid are beginning to execute ideas on a larger scale and scope, such as Tewer, Nyuron or Billin. The city has co-working spaces like Utopicus Colegiata, FLAG COWORKING or Spaces. Also, startups in Madrid may benefit from accelerators such as Gorilla Ventures or XEdu.
6. Stockholm, Sweden
This city, with a small population of 1.5 million citizens, is recognized as one of the strongest startup ecosystems today. It is also the scene of successful stories such as Spotify, Skype or Mojang /Minecraft.
Behind Silicon Valley, Stockholm has the largest concentration of billion-dollar companies per capita. Due to the Ericsson‘s decline, many highly skilled engineers started companies and unleashed their potential. As a result, Stockholm has built unique business models and engaged with entrepreneurs across the globe with startups such as Karma, Kry or Hedvig, having as accelerators/incubators companies like STING or SU Inkubator.
7. Bengaluru, India
Bengaluru may seem like a surprising city to be included in our list, but it is filled with talent. After outsourcing local talent to foreign companies, it has evolved to become a startup ecosystem itself thanks to Government initiatives.
The city has incredibly affordable housing and it has grown to be the third largest startup ecosystem, with success examples as Zoomcar, FreshMenu and OYO. Bengaluru ecosystem benefits from accelerators and Incubators like Global INcubationSERVices, IIIT – Bangalore Innovation Centre or Khosla Labs.
8. London, UK
This city has a booming startup scene while excelling in the technology sector and considered Europe’s technology capital.
Whatever happens with the Brexit, the £5 billion in VC funding is an excellent incentive for startups like Trouva, syft or Talentful. Londons has incubator hatch enterprises; university-affiliated startup hubs like JLab and accelerators like SeedCamp.
9. Boston, USA
Boston is home to MIT, Harvard, and other prominent colleges. With a long history of software engineering and innovation development, it is only logical that most of the startups in Boston are related to those institutions. This is good and bad, since it is expected that an entrepreneur that wants to succeed in Boston most have some link to a university.
Therefore, Boston’s startup ecosystem is different from Silicon Valley in socializing and building networks, focusing on communication and building trust. Startups like Veo Robotics, PathAI or alyce benefits from these macro dynamics, with help from accelerators like MassChallenge, TiE ScaleUp or Techstars.
10. Copenhagen, Denmark
One of the strengths of the Danish ecosystem is the interconnection. So if you want to found a startup in Copenhagen, you might be able to receive big investments from business angels, as well as government support to newly formed businesses from the “Danish Startup Fund”.
However, there’s limited access to early-stage funding. Salaries are high, and it’s difficult to access to foreign talent in Denmark. But still startups like SOUNDBOKS, OrderYoyo or Valuer.ai have triumphed in Copenhagen; and there are accelerators such as Thinkubator, Accelerace or Go Grow that can help you in your endeavors.