Is Miami the new Silicon Valley? Not yet, but considering its popularity among early-stage startups, maybe it’s on its way.
In the second quarter of 2021, Miami brought in a record-breaking $831M in venture capital investments. The 142% jump from pre-pandemic funding levels is partly fueled by venture-backed startups being launched in Miami as their founders moved away from higher-cost states like California and New York to Florida, a low-tax state.
What does this mean for Miami?
In Q2 alone, funding rose by 271%, split across 50 investment deals. But compared to major venture capital areas like Silicon Valley, New York, and Boston, the capital invested in Florida is small. Miami’s Q2 capital infusion accounted for only 1% of the total VC investments nationwide.
Still, experts anticipate investor activity to continue expanding in Miami. The city is a diverse, no-income-tax, work-life balanced, tropical oasis popular among startups and replants alike. Far from its past reputation as a retirement town, Miami boasts a healthy labor pool of engineers, scientists, techies and more.
Miami also has the benefit of being home to two major universities, Florida International University and the University of Miami. These schools bring top-tier talent to the area. They also provide key resources for local startups, including a legal clinic to help small businesses navigate codes and regulations, and The Launch Pad, University of Miami’s entrepreneurship center.
Miami, a new tech hub
Regardless of Miami’s national VC ranking, the city is clearly gaining status as a tech hub. Of the Top 10 Q2 deals in Miami, nine deals were with tech-centric companies. These nine companies represent the fintech, healthtech, medtech and edtech sectors. Technology startups alone raised nearly $1B in venture funding in 2020.
Tech companies in bigger cities like New York and San Francisco also have to contend with persistent talent-poaching. With so many influential companies concentrated in these big cities, valuable employees can leverage their opportunities and bounce between jobs. This talent battle is expensive and unproductive for growth-focused companies. However, in Miami, talent-poaching is less of an issue for now with fewer companies warring over employees .
Notable new Miami companies
In July alone, three major VC deals were signed into action. Lula, an insurance infrastructure startup, raised $18M in funding at the beginning of the month. Notable investors included SoftBank, Florida Funders and the Boston Celtics owner.
Marco, a company that helps give Latin American businesses loans to cover the cost of exporting goods to the US, raised $82M in VC funding. This is the second round of funding the company has successfully secured in Miami’s VC market.
The third Miami-based company to secure major VC funding in July is Unybrands, bringing in $300M of new capital. Unybrands is an e-commerce group that helps product-focused businesses scale quickly.
Looking ahead
A big benefit of launching your startup, or relocating your current company, to Miami is the growing business community. The innovative ecosystem attracts a variety of business leaders, like those who have started the major businesses above, who are fairly new to the area and looking to expand. Entrepreneurs who can plant themselves in the community during this growth-period are sure to have an advantage in the long-term. With the opportunity to build key relationships with major local business leaders and have early pick of up-and-coming talent, Miami is quickly becoming a popular startup hub.
