When you hear the word “startup,” what comes to mind? Probably a new business located in a bustling metropolitan area such as New York City or Silicon Valley, right? While most of us associate the startup scene with the country’s largest coastal cities, a new startup study suggests these stereotypes aren’t entirely founded.
While there are indeed high concentrations of startups in and around San Fran and NYC, the reality is, young companies are thriving across the country.
That’s good news for entrepreneurs who want to start a business without relocating to a coastal city or who would like to take advantage of lower business and residential costs by setting up shop in less expensive states. It also means there are relatively untapped resources to be found in unexpected places.
Here’s a closer look at this uplifting data.
Startups, startups everywhere
Earlier this year, CB Insights, a research and data-analysis firm, released a startup study examining the most well-funded startups across the United States. The research drew on data that identified the most well-funded, VC-backed technology startups in every state based on disclosed equity funding. The review limited itself to startups that have raised at least $1 million of equity funding to date. It excluded startups that hadn’t raised a round of equity financing since 2015, so the results are based on extremely recent data.
“The tech boom has diffused beyond the traditional hotbeds of California, New York and Massachusetts, across the … entire United States,” wrote the study’s authors. “Other states are home to well-funded and well-known startups.”
Indeed, companies in 46 states and Washington, D.C. met the criteria for the startup study. (The exceptions were Alaska, Mississippi, and North and South Dakota; the study utilized data from 2015 in order to include these states on the list.) This means startups hailing from unexpected states — such as Alabama, Georgia, Hawaii and Utah — are finding it possible to raise more than a million dollars from their respective locales.
The biggest startup earners by state
Some startups on the list have raised significantly more than $1 million. Twenty companies from the list have raised more than $100 million in disclosed equity funding to date. Seven startups on the list — including Infor (NY), IO (AZ) and OneWeb (VA) — have raised $1 billion or more in disclosed equity funding to date. Several companies on the list — including Infor, OneWeb and Uber (CA) — have raised more than $1 billion in a single round of funding at least once. Meanwhile, 17 companies on the list — including Hobnob (HI) and Zlien (LA) — have raised less than $50 million (but more than $1 million per the criteria for the study).
For the curious, here’s the full list of the most well-funded startups by state (according to CB Insights):
|Tenable Network Security||Maryland|
|Next Gear Solutions||Mississippi|
|Packet Digital LLC||North Dakota|
|Everything But The House||Ohio|
|Weather Decision Technologies||Oklahoma|
|Digital Reasoning Systems||Tennessee|
|Vox Media||Washington, D.C.|
Biggest startup earners by state
- Shipt — Alabama
- Resource Data — Alaska
- IO — Arizona
- Acumen Brands — Arkansas
- Uber — California
- Welltok — Colorado
- Datto — Connecticut
- SevOne — Delaware
- Magic Leap — Florida
- GreenSky — Georgia
- Hobnob — Hawaii
- CradlePoint — Idaho
- Avant — Illinois
- Scale Computing — Indiana
- Involta — Iowa
- C2FO — Kansas
- Lucina Health — Kentucky
- Zlien — Louisiana
- CashStar — Maine
- Tenable Network Security — Maryland
- DraftKings — Massachusetts
- Llamasoft — Michigan
- Code42 Software — Minnesota
- Next Gear Solutions — Mississippi
- Varsity Tutors — Missouri
- Submittable — Montana
- Hudl — Nebraska
- Soothe — Nevada
- Plexxi — New Hampshire
- Vidyo — New Jersey
- TriLumina — New Mexico
- Infor — New York
- AvidXchange — North Carolina
- Packet Digital LLC — North Dakota
- Everything But The House — Ohio
- Weather Decision Technologies — Oklahoma
- G5 — Oregon
- Aquion Energy — Pennsylvania
- Upserve — Rhode Island
- Glytec — South Carolina
- ReliaMax — South Dakota
- Digital Reasoning Systems — Tennessee
- DrillingInfo — Texas
- Domo — Utah
- Ello — Vermont
- OneWeb — Virginia
- Avalara — Washington
- Vox Media — Washington, D.C.
- Geostellar — West Virginia
- Networked Insights — Wisconsin
- Alces Technology — Wyoming
Startup study says unicorns do exist (and not just in Silicon Valley)
In addition to revealing that well-funded startups exist throughout the country, the study also uncovered the location of nine unicorns — i.e., companies valued at $1 billion or more — across the country.
Few will be surprised to learn that Uber raised the most funding (to the tune of $12.5 billion). Other unicorns that are the most well-funded startup in their respective state include:
- Avant (IL)
- Datto (CT)
- Domo (UT)
- DraftKings (MA)
- GreenSky (GA)
- Infor (NY)
- Magic Leap (FL)
- Vox Media (Washington, D.C.)
Another startup study from CB Insights that was released in December 2016, reveals California still has a lock on billion-dollar companies, with more than any other state (New York and Massachusetts take second and third for that title, respectively). The state is also home to four of the top five most well-funded U.S. unicorns — namely, Airbnb, Palantir Technologies, Snap and Uber (the fifth startup in this category is Infor, which is based in Virginia).
Three of these California companies also top the most valuable unicorns in the United States list: Airbnb (valued at $30 billion), Palantir Technologies (valued at $20 billion) and Uber (valued at $68 billion).
Still, California’s reign might be short-lived, as more and more billion-dollar companies are popping up across the country. As of December 2016, the United States was home to 98 unicorns, worth a collective $372 billion. Along with California, New York and Massachusetts, 10 other states are hosts to at least one of these monster companies.
No longer confined to specific regions of the country, entrepreneurs are enjoying lower costs, greater flexibility and untapped potential without sacrificing their chance at funding. Who earns the most is no longer a function of location. Massive funding rounds and national recognition are now anyone’s game.