Phoenix, December 18, 2025
Phoenix has been named the leading U.S. city for startups, achieving a remarkable score of 62.1. This growth is fueled by a 27.4% increase in new businesses and a surge of 28.9% in college-educated residents. Ranking first in startup density, the city has established a vibrant entrepreneurial ecosystem, supported by Arizona State University and a youthful population, making it an ideal destination for entrepreneurs and investors.
Phoenix Reigns as America’s Startup Capital
Phoenix has emerged as the leading U.S. city for startups among those with populations exceeding one million, according to a recent analysis by CommercialCafe. The city achieved an impressive score of 62.1 out of 100, leading in startup density while witnessing a remarkable 27.4% growth in new businesses from 2019 to 2023. Additionally, Phoenix experienced a 28.9% surge in college-educated residents between 2019 and 2024, further bolstering its thriving entrepreneurial ecosystem.
Key Factors Contributing to Phoenix’s Top Ranking
- Startup Density: Phoenix boasts the highest startup density among major U.S. cities, with 11.2% of new businesses less than one year old.
- Business Growth: The city has seen significant business expansion, leading the nation with a 27.4% increase in new businesses from 2019 to 2023.
- Educational Attainment: A substantial rise in college-educated residents is evident, with a 28.9% increase from 2019 to 2024.
Comparative Performance of Other U.S. Cities
In addition to Phoenix, several other cities are notable in the startup landscape:
- San Antonio: Scored 57.1, excelling in cost metrics such as affordable labor and office space.
- Jacksonville, FL: Distinguished itself with the highest freelance growth.
- New York City: Recognized for its extensive networking opportunities that benefit entrepreneurs.
- San Diego: Known for its research-driven advantages, boasting a high percentage of residents with bachelor’s degrees.
Background on Phoenix’s Startup Ecosystem
Phoenix has established itself as a strong player in the realm of startup activity over the years. It was ranked seventh-best state for starting a business in 2023 by WalletHub. The city’s vibrant growth is supported by leading institutions such as Arizona State University, recognized as the top school in innovation for nine consecutive years. Furthermore, the Greater Phoenix area benefits from a youthful and dynamic population, with a median age of 37.6, fostering an environment ripe for entrepreneurship.
Conclusion
Phoenix’s exceptional ranking as the top U.S. city for startups highlights its robust ecosystem characterized by high startup density, remarkable business growth, and an increasing number of college-educated residents. These collective factors position Phoenix as an ideal destination for entrepreneurs and investors aiming to thrive in a supportive and innovative business climate.
Frequently Asked Questions (FAQ)
What factors contributed to Phoenix’s top ranking for startups?
Phoenix’s top ranking is attributed to its high startup density, significant growth in new businesses, and a substantial increase in college-educated residents.
How did Phoenix compare to other U.S. cities in the startup ranking?
Phoenix led the ranking with a score of 62.1, followed by San Antonio, Jacksonville, New York City, and San Diego.
What is the current state of Phoenix’s startup ecosystem?
Phoenix continues to be a leading hub for startups, supported by institutions like Arizona State University and a young, dynamic population.
How has Phoenix’s population growth impacted its startup environment?
The city’s population growth, particularly among college-educated residents, has enhanced its startup ecosystem by providing a skilled workforce.
What other cities are considered top startup destinations in the U.S.?
Other top startup cities include San Antonio, Jacksonville, New York City, and San Diego, each excelling in different aspects of the startup environment.
Key Features of Phoenix’s Startup Ecosystem
| Feature | Details |
|---|---|
| Startup Density | 11.2% of new businesses are less than one year old. |
| Business Growth | 27.4% increase in new businesses between 2019 and 2023. |
| Educational Attainment | 28.9% increase in college-educated residents from 2019 to 2024. |
| Supporting Institutions | Arizona State University, ranked No. 1 in innovation for nine consecutive years. |
| Population Demographics | Median age of 37.6, fostering a young and dynamic workforce. |
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