In the world of start-ups, achieving ‘unicorn’ status, a privately held start-up valued at over $1 billion, is a symbol of remarkable success and innovation. While Silicon Valley, New York, and London are often considered the birthplaces of these entities, numerous underrated cities worldwide also have impressive start-up ecosystems. These emerging tech hotspots offer an array of unique benefits such as lower operational costs, supportive government policies, burgeoning talent pools, and growing tech industries. Here are the top nine underrated cities for building your unicorn company, ordered by their total funding capitalization, from least to most:
9. Auckland, New Zealand
Auckland, home to around 26% of New Zealand’s tech firms, offers a solid tech infrastructure, high living standards, and access to the Asia-Pacific markets. In 2021, the New Zealand government allocated $332 million to R&D grants, providing a strong support system for tech start-ups.
8. Lisbon, Portugal
Lisbon has emerged as an attractive tech hub, offering high-quality talent, low costs, and an excellent quality of life. It hosts the annual Web Summit, one of the world’s largest tech conferences. In 2020, Portuguese start-ups raised over €500 million, and the number is expected to grow with the government’s increased focus on fostering the start-up ecosystem.
7. Pittsburgh, USA
Pittsburgh, once the epicenter of the steel industry, is experiencing a rebirth as a tech powerhouse. Aided by Carnegie Mellon University, an institution at the forefront of artificial intelligence and robotics research, the city is attracting a diverse mix of start-ups and tech giants. Google, Uber, and Facebook have all established offices here, taking advantage of a cost of living that’s 18.3% lower than the national average. With over 23,000 tech-related jobs and $687 million in venture capital investment in 2021, Pittsburgh provides a fertile ground for nurturing unicorns.
6. Vancouver, Canada
Vancouver’s tech industry is growing twice as fast as the rest of its economy, contributing over $23 billion annually. The city boasts a diverse talent pool, proximity to U.S. markets, and supportive immigration policies for tech talent. With over $1 billion in VC investment in 2021, it’s a hot spot for aspiring unicorns.
5. Stockholm, Sweden
Sweden’s capital city is a burgeoning tech hub and the birthplace of international successes such as Spotify and Klarna. According to a 2020 report, Stockholm-based startups attracted over $1.4 billion in investments, making it a European standout.
4. Seoul, South Korea
Home to tech giants like Samsung, Seoul’s start-ups raised over $3.8 billion in 2021. The city, known for its tech-savvy population, is benefiting from the South Korean government’s “Venture Renaissance” initiative, which includes a $3.7 billion fund for start-ups.
3. São Paulo, Brazil
São Paulo, Latin America’s largest tech hub, houses over 2,700 active start-ups, according to Startup Genome’s report. The city’s unicorns, like Nubank, are indicative of the thriving entrepreneurial scene supported by a healthy availability of venture capital. In 2021, Brazilian start-ups raised $5.2 billion, a majority of which was secured by São Paulo-based businesses.
2. Bangalore, India
Nicknamed the “Silicon Valley of India,” Bangalore houses 35% of India’s IT industry, employing over 10 million people. It’s home to an impressive number of unicorns such as Flipkart, Byju’s, and Zomato. With its robust ecosystem supported by an abundance of tech talent and a lower cost of operation than most Western cities, Bangalore secured a whopping $10 billion in funding in 2021, making it a hotbed for tech start-ups.
1. Tel Aviv, Israel
Dubbed “Silicon Wadi,” Tel Aviv boasts the highest density of tech start-ups in the world, with around 6,000 start-ups in a city of just over 450,000 people. The city also enjoys a strong venture capital scene, with Israeli start-ups raising a record $10 billion in 2021. Tel Aviv’s success as a tech hub is further supported by excellent R&D facilities and a well-established culture of innovation.
These underrated cities offer a unique blend of resources, support, and opportunity, making them ideal locations for aspiring entrepreneurs and start-ups aiming for unicorn status. From talent and infrastructure to cost-effectiveness and business-friendly policies, these cities are increasingly important players in the global tech scene.
