Phoenix, December 18, 2025
Phoenix has been ranked as the leading city for startup activity in the U.S., boasting a startup density of 11.2% and a 27.4% growth in new businesses from 2019 to 2023. The city’s vibrant entrepreneurial ecosystem continues to thrive, supported by a projected 28.9% increase in college-educated residents by 2024. This growth reflects Phoenix’s robust talent pool and support from top universities, making it an attractive destination for entrepreneurs and investors alike.
Phoenix: The Leading City for Startup Activity in the U.S.
Phoenix has emerged as the top U.S. city for startups among those with populations exceeding 1 million, according to a recent analysis by CommercialCafe. Scoring 62.1 out of 100, the city has distinguished itself through notable startup density and a remarkable 27.4% growth in new businesses from 2019 to 2023. Additionally, with a 28.9% increase in college-educated residents anticipated between 2019 and 2024, Phoenix’s entrepreneurial ecosystem is only gaining momentum.
Key Factors Contributing to Phoenix’s Top Ranking
- Startup Density: Phoenix leads all major U.S. cities in startup density, with 11.2% of new businesses being less than one year old.
- Business Growth: The city achieved the highest growth rate in new businesses between 2019 and 2023 at 27.4%.
- Educational Attainment: The city recorded the second-highest increase in college-educated residents, rising 28.9% from 2019 to 2024.
Comparative Performance of Other U.S. Cities
Following Phoenix, the top-ranked cities for startups with populations over 1 million include:
- San Antonio: Scored 57.1 points, excelling in cost-related metrics such as labor costs and office space affordability.
- Jacksonville, FL: Led in freelance growth.
- New York City: Recognized for its extensive networking opportunities.
- San Diego: Noted for its research hub advantage, with the highest share of residents holding bachelor’s degrees.
Background on Phoenix’s Entrepreneurial Landscape
In past years, Phoenix has consistently ranked among the top 10 U.S. cities for startups. However, recent advancements have catapulted it to the top position. The rapid growth is fueled by a robust talent pool, with over 100,000 tech employees recorded as of Q1 2024. Arizona State University (ASU) has significantly contributed to this landscape, being recognized as the No. 1 institution in innovation for 11 consecutive years. ASU’s J. Orin Edson Entrepreneurship + Innovation Institute offers degrees, programs, collaborative spaces, and funding designed to cultivate entrepreneurial development. The University of Arizona (U of A) further enhances the ecosystem with its undergraduate degree in entrepreneurship and the highly-ranked McGuire Entrepreneurship Program.
Implications for Entrepreneurs and Investors
Phoenix’s rise in startup rankings illustrates its growing allure as a thriving hub for innovation and business development. Entrepreneurs and investors are increasingly taking note of the city’s supportive environment, characterized by an expanding talent pool, competitive operational costs, and a dynamic entrepreneurial community. These trends suggest a bright outlook for startups in Phoenix, presenting ample opportunities for growth and collaboration.
Key Features of Phoenix’s Startup Ecosystem
| Feature | Details |
|---|---|
| Startup Density | Leads all major U.S. cities with 11.2% of new businesses under one year old. |
| Business Growth | Highest growth in new businesses between 2019 and 2023 at 27.4%. |
| Educational Attainment | Second-highest increase in college-educated residents, rising 28.9% from 2019 to 2024. |
| Tech Talent | Over 100,000 tech employees as of Q1 2024, with a 30.1% growth between 2017 and 2022. |
| University Support | ASU named No. 1 in innovation for 11 consecutive years; U of A offers top-ranked entrepreneurship programs. |
Frequently Asked Questions (FAQ)
What factors contributed to Phoenix’s top ranking for startups?
Phoenix’s top ranking is attributed to its leading startup density, significant growth in new businesses, and a substantial increase in college-educated residents between 2019 and 2024.
How does Phoenix compare to other U.S. cities in terms of startup activity?
Phoenix outperforms other major U.S. cities with populations over 1 million in startup density and business growth, surpassing cities like San Antonio, Jacksonville, New York City, and San Diego.
What role do local universities play in supporting startups in Phoenix?
Local universities, particularly Arizona State University and the University of Arizona, provide essential support through innovation programs, entrepreneurship degrees, and collaborative spaces that foster startup growth.
What does Phoenix’s top ranking mean for entrepreneurs and investors?
Phoenix’s top ranking highlights its growing appeal as a hub for innovation and business development, offering entrepreneurs and investors a supportive environment for growth and collaboration.
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Author: STAFF HERE JACKSONVILLE WRITER
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